OK, that happened. Brexit is one of the most stunning surprises in recent memory, certainly up there with the collapse of the Soviet Union or the success of Adam Sandler for sheer shock value. There has been plenty of analysis and speculation about what this might mean and where it could end. Smarter people have more to say so I wont add to commentary about the outcome itself. Two aspects of last week’s events, however, are of interest. Firstly, this result challenges the impregnable belief in the power of prediction markets. Financial markets had been sanguine about the outcome because betting markets suggested it would be an easy win for the remain camp. There are plenty of occasions when betting markets perform better than polls and other forms of prophesy but that success is built on the idea that insiders with superior information generate superior insights. For an event like Brexit, where there is no inside information, the power of prediction markets is limited. Read full article: (VIEW LINK)
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