Politics and Intrade
Intrade changes the psychology of politics. As a voter, I can participate twice, once in the primary and once in the general election. I can show up at the prescribed time and place like a dog that comes when he’s called. I can stand in line like a good little citizen, show my photo ID, and choose between the Red Team and the Blue Team. It doesn’t matter who I vote for. In a national election, I’m more likely to be run over by a bus on my way to vote than I am to tip the election one way or the other.
As an arbitrageur in a prediction market, I can participate early and often. I can participate in both the Red and Blue primaries. I can participate in the contests for Vice President. I can participate whenever it is convenient for me. I can participate sitting down, with a refreshing adult beverage by my side. I can even participate in my sleep. I woke up this morning and found that my short position in Rudy Giuliani got covered at a profit by a limit order. So I shorted a few more Fred Thompson.
A voter sees an endless spectacle that tries to motivate him to vote for someone. As an arbitrageur, I see more opportunities in taking positions against someone, simply because there are always more losers than winners. I shorted 12 different VP candidates in all, including people I’ve never heard of.
It may not matter who I vote for, but it really does matter who I bet against.