In my last post I argued that the price at last trade in a prediction market doesn't generally correspond to the belief of an average or representative trader in any meaningful sense, and ought not to be interpreted loosely as the "perceived likelihood according to the market" that the underlying event will occur.
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From Order Books to Belief Distributions
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In my last post I argued that the price at last trade in a prediction market doesn't generally correspond to the belief of an average or representative trader in any meaningful sense, and ought not to be interpreted loosely as the "perceived likelihood according to the market" that the underlying event will occur.