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Anders_H comments on Actually existing prediction markets? - Less Wrong
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Comments (19)
Actually, the "yes" and "no" shares are the same contracts: Buying a "yes" contract is exactly the same thing as selling a "no" contract. The best offer for "buy yes" plus the best offer for "sell no" will always equal 1, without requiring arbitrage or any action on the part of the market participants.
For some reason they have chosen a counterintuitive user interface such that these contracts appear to be different from each other, but they are the same.
Yes, I suppose my comment wasn't clear. There are twice as many distinct prices as there should be, not 4x. There should only be one price per candidate (plus an additional price for "other" in many cases). The "buy no" price for a single candidate should be equal to the sum of the "buy yes" prices for all the other candidates, and that relationship should be fully enforced by the exchange.