[Intrade markets] continued to show about a 75 percent chance that the law's so-called mandate would be ruled unconstitutional, right up until the morning it was ruled constitutional.
The market-the wisdom of crowds-turned out to be wrong.Corrections sees risk premia and self-insurance everywhere, but let's take the common view of Intrade markets, that the price/10 is equivalent to the probability the market puts on an event.
Are political writers like Leonhardt so ignorant of statistics to know what "wrong" means? 75% represents a distribution of outcomes! If you looked at all Intrade markets that were at and around 75%, and then looked at the outcomes, if they were "right" (by Leonhardt's incorrect statistic) 100% of the time we should conclude these are poorly functioning markets.
No. If you predict something should happen with 75%, then it should not happen 25% of the time, and happen 75% of the time. Not happening 25% of the time means you are correct in your guess about the distribution. 75% represents a distribution of outcomes. A 90% guess would be more wrong than 75% in general, when the outcome actually happens 75% of the time. The relative entropy of the distributions is what helps us differentiate them statistically.
New York Times quality article.