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Jayson_Virissimo comments on 1001 PredictionBook Nights - Less Wrong
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Another problem:
After fall of Tripoli and 90% of Libya falling under control of NTC, intrade contract that "Muammar al-Gaddafi to no longer be leader of Libya before midnight ET 31 Aug 2011" was getting lower each day intrade did not close it as done, since it became the contract that "intrade will not fuck up judging".
There was zero disagreement about facts and predictions of facts on the ground, everybody agreed that Gaddafi's government fell, so it turned into very heavy trading about intrade's sanity, and people estimated chance of sane judgment as ~67% event.
Intrade judged sanely that time, but with so much distrust in judges, prediction markets on anything more clear-cut than election results simply cannot work.
In one of previous threads about it, SilasBarta had an example where intrade fucked up, so I doubt this is an off chance.
Japan to announce it has acquired a nuclear weapon before midnight ET on 31 Dec 2011: 11% chance
Japan to announce it has acquired a nuclear weapon before midnight ET on 31 Dec 2012: 15% chance
Japan to announce it has acquired a nuclear weapon before midnight ET on 31 Dec 2013: 5% chance
This was found here at 07:45, 10/18/2011.
Yes, that's pretty amusing. On the other hand, remember that the further in the future a contract is, the more mispriced you can expect it to be - Intrade does not pay interest or otherwise compensate you for opportunity cost. (I believe this was covered in one of the footnotes.)