In comment 2, Emmett said, "You're not accounting for the costs of investigating the prediction market itself."

Which is true, but I think the point is not that you should bet. The point is that *if you have strong beliefs on the subject*, you should bet. Obviously, if you think Obama is going to do better than the polls suggest, you have strong opinions and have *already* investigated the issue.

The combination of "I have a strong rational belief in X and believe the betting market is wrong" and "I am nonetheless choosing not to bet" indicates that the belief is not rational at all.

To those people who say that they don't bet on principle ... I say, set up a sting operation where you offer them a no-brainer, like even money that Obama will get more than 10% of the vote. When they jump at that one, they will never again have a decent excuse for not betting.

Not to draw attention away from your main argument, but how does 1101 map onto {0, 2, 3}? It's probably obvious, but I don't see it.