A new academic paper digging into presidential betting in the final weeks of the 2012 election finds that a single trader lost between $4 million and $7 million placing a flurry of Intrade bets on Mitt Romney—perhaps to make the Republican nominee’s chance of victory appear brighter.
Two economists who studied the data offer various rationales for the trader’s aggressive wagering on Mr. Romney in the final two weeks of the campaign. The anonymous trader placed 1.2 million pro-Romney contracts, some of which were actually in the form of bets against a Barack Obama victory.via the WSJ via PoliticalWire
The most plausible reason for the betting, the authors conclude, is that “this trader could have been attempting to manipulate beliefs about the odds of victory in an attempt to boost fundraising, campaign morale, and turnout.”
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