Markets Say: “Barry Bonds Almost Certainly To Serve Time”
posted by Dave Hoffman
The Intrade contract price for Barry Bond’s guilt is currently trading at 75, which means traders estimate that there is a 75% chance that Bonds will either by convicted or plead guilty to the original charges. As I once discovered to my chagrin, this does not mean that traders believe that Bonds has a 25% chance of avoiding a conviction. As the contract rules state:
The contract will settle (expire) at 0 ($0.00) if (including, but not limited to):- Barry Bonds is found not guilty in a trial by jury or judge
- All charges are dropped
- The case is dismissed
- There is a mistrial
- Barry Bonds pleads guilty only to lesser charges as part of a plea agreement (please note that if Bonds pleads guilty to any of the original charges as part of a plea agreement the contract will expire at 100)
The italicized rule is the kicker. Since you’ve got to figure that a plea is highly likely, it fair to say that traders estimate the likelihood that Bonds will face time to be a near certainty.
Of course, volume has been almost nonexistent. The question of how illiquid a prediction market can be while remaining efficient is beyond my pay-grade.
(Image Source: Wikicommons)
November 21, 2007 at 2:35 pm
Posted in: Criminal Law
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Responses (1)
Frank - November 21, 2007 at 4:54 pm
B-P have some interesting comments on the bond market as predictor:
http://www.becker-posner-blog.com/archives/2007/11/is_the_bond_mar.html
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