David Brooks: Intrade prediction market ‘extremely stupid’

Jeff Poor Media Reporter
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During the “Doubleheader” online segment of PBS’s “NewsHour” on Friday, New York Times columnist David Brooks revealed why he isn’t a fan of Intrade, a highly cited website that makes predictions on a market basis.

Intrade poses questions that either have a “yes” or “no” outcomes, and that outcome either settles in at $0.00 or $10.00 a share.

“For example, we currently have a market for Barack Obama to be re-elected President in 2012. If Obama is re-elected then the market will settle at $10.00. If he is not re-elected the market will settle at $0.00,” the site’s “How it works” page explains.

But Brooks called that “extremely stupid” because the share price is too reliant on what polls say.

“Intrade, which is the website we follow … is extremely stupid by the way,” Brooks said. “I do not believe in Intrade, by the way, where they bet on who they think is going to win. It’s sort of like a stock market and it’s supposed to be the wisdom of crowds. It’s extremely volatile because whoever the last poll is, the whole market just zooms over there.”

Intrade currently gives Romney an 86.6 percent chance (or $8.58 a share) shot of winning the GOP nomination. But Brooks says a high number might not be accurate because of the “tough slog” Romney has ahead of him.

“But they have Romney at, like, a 98-percent chance of winning that thing, which is way too high,” Brooks said. “But he will probably still win it. Not that it will help him all that much. I mean, the next few weeks are pretty bad for him — not bad but medium, a lot of southern primaries. So he has more of a tough slog.”

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