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palladias comments on [LINK] Was Intrade being manipulated? - Less Wrong Discussion
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As an InTrade bettor, I think a lot of the mispricing is just driven by wrong beliefs. In the primary season, I could usually get good prices to short Ron Paul and I thought it was likely to be because American InTrade bettors (internet savvy, ok with questionably legal things involving money, nerdy) overrepresent Paulites. No manipulation, just sampling problems.
I assumed that demographics of InTrade made it pretty likely they'd overprice marijuana legalization, too, and I had to pull my money out of the Colorado market with a quickness once I'd heard the referendum was actually getting editorial page endorsements. :)