Everyone likes to think the market is efficient, ferreting out misinformation and biases to create a fair price. So how wrong was the prediction market late last December that put Sarah Palin's odds at winning the Republican presidential nomination at better than one in five? Those odds come via InTrade, the market known for accurately picking winners of presidential elections and other events. It was so wrong that today her odds of getting the nod sit at a mere 0.4% (despite her recent proclamation that "it's not too late" for other nominees to enter the race).
Even after her chances plummeted from highs near 30% in 2010, traders still believed that Palin, the best-selling author and political pundit who reportedly earns $1 million annually from her Fox News Channel television contract, had a strong shot at earning Republicans' nomination. But with the riches Palin makes as a Tea Party darling, did people really think she'd run? Today the InTrade traders are betting on Romney, whose odds of winning the Republican nomination have risen to 74%.
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