Intrade Shutdown Hurts Academics 131
New submitter jader3rd writes "Intrade, a popular Irish website that lets people bet on anything, has shut down. In addition to being used by gamblers, Intrade has been used by academics and pundits to track public sentiment. '"... broad crowds have a lot of information and that markets are an effective way of aggregating that information," says Justin Wolfers, "and they often turn out to be much better than experts."' Being forced to lose their U.S. customers couldn't have helped.
Intrade Unethical (Score:2, Interesting)
The summary left out the an important part of the about why Intrade is closing.
According to www.Intrade.com
" With sincere regret we must inform you that due to circumstances recently discovered we must immediately cease trading activity on www.intrade.com.
These circumstances require immediate further investigation, and may include financial irregularities which in accordance with Irish law oblige the directors to take the following actions: "
In 2005, Intrade specifically made an agreement with the CFTC not to trade options on commodities and futures. Then in 2011 they broke that agreement by offering options on commodities and futures, thus resulting in the CFTC filing a lawsuit against them. At one point they limited the access of the api to a few customers to prevent competition from other members.
Good (Score:3, Interesting)
The problem I have with futures trading is that it creates incentive for things to go one way or another.
What if I were to bet 500k that ${ASSASSINATION_TARGET} was not going to die by getting shot and then thrown in the east river tomorrow?
Someone who sees that would then have incentive to make that happen.
Even in more limited ways it can still be a problem. Sports history has instances of people throwing games in order to make large amounts of money. I could see the same causing sabotage in industry. You cant publicly bet on things without changing the probability that they will happen.
Re:The question (Score:2, Interesting)
The real question for you is whether that non-1:1 correlation is with those particular activities or with the prohibition of those activities. There are many proponents of legalization that are not enthusiasts of the substance/activity but, instead, believe that the black market created by prohibition is to blame for the majority of the problems.