Alex Tabarrok points to a critique of prediction markets, regarding the fact that betting markets had Chicago being the favorite to win the 2016 Summer Olympics over Madrid, Rio, and Tokyo.
Why were the odds so awry on the 2016 hosting city? I had assumed Rio would win in a walk, and yet, as shown in the following figure, Chicago was the favorite among oddsmakers.
I normally wouldn’t have much to say here, but I just happened to be following the prediction market on FridaySource: Sabernomics RSS Feed
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