(this assumes no transaction costs too)

It seems to me that the average citizen overestimates the probability of the less-likely event for this election (http://blogs.wsj.com/numbersguy/poll-asks-for-presidential-predictions-rather-than-preference-444/), but the combined-polling sites are overestimating (massively in some cases) that same probability. I think the distribution for this election is unknowable/unmodelable, but that 5-10% McCain from the markets on the last day is the guess that I would take.

I don’t know for sure if this is the same thing, but don’t folks in the financial world get into trouble (’blow up’) for relying too much on statistical models?

Some participants are mostly in it for fun or gambling. There is little fun or glory in making a small profit on an almost sure thing. Thus players will prefer to play a more exciting contract. Berb above is a great example of this.

Other participants are in it for a serious profit. In liquid financial markets, they can take advantage of even small discrepancies to profit. However on Intrade, where there are substantial trading fees and no interest is paid on deposits, there is little profit to be had on correcting a market mispricing of only a few percent. This is why, for example, the Al Gore contract is still trading at 0.3 cents — no one cares enough to correct it.

The best thing is to think of Intrade as accurate to within 5%. Once the likely probability goes above 85-90% or below 10-15%, Intrade is no longer a useful indicator.

Now, not all buyers are as wise as each other.
My guess(hunch) is that electronic markets are less accurate than 538, PEC, VEC et al.
I think if you check the data I would be right.?
Of course, the market makers would say they are better judges but ask Lehman Bros about that?

If only I had some magical way of sending them a check overnight to add funding to my account, then I could have kept the Obama and still invested some into other stuff… oh well.