Intrade totally blew it with the Sarah Palin pick, and some people have been using this as part of a molehill of anecdotal evidence for why prediction markets are fundamentally flawed. I agree that some specific predictions have sucked, although I suspect that they would have been better if there had been a larger sample size. (A larger sample size would be easier to amass if the contracts were more openly legal, but I digress.)
But the great part about prediction markets is that if you think any other system is better, you're free to use those predictions to guide which contracts you will buy in the prediction market. If your other system is indeed better, then you will quickly become outlandishly rich. So the question is... if you think prediction markets suck, then why aren't you a multi-millionaire?
(Hat tip: Benny Caz)
