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gwern comments on Rational Me or We? - Less Wrong
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Googling some more, relevant links are http://www.overcomingbias.com/2007/11/intrade-fee-str.html and http://bb.intrade.com/intradeForum/posts/list/4471.page
Probably could find more examples of how Intrade is not an optimal prediction market using this tag: http://www.overcomingbias.com/tag/prediction-markets