football

The political handicappers who take part in the prediction markets are not saying that Perry would lose a primary election to Romney today. Rather, they are betting that Romney is slightly more likely to win when the primaries are actually held in a few months.

The chart below plots one line showing the collective poll results for Perry in the wake of his announcement alongside another showing how the prediction markets have behaved over the same time:

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The Phillies season has gone just as expected, with a few bumps along the way. Why has the likelihood changed? Because the march of time has eliminated the uncertainty that a long campaign brings to the outcome.

Then the news of Peyton Manning's injury unfolded, and their likelihood of winning dissipated to near zero. In this situation the movement actually quantifies the value of the missing player (or, in politics, the cost of a campaign mistake).

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