Prediction Markets, Twitter and Bigotgate

Leighton Vaughan Williams () and J Reade

No em-dp2014-09, Economics Discussion Papers from Department of Economics, University of Reading

Abstract: We consider the impact of breaking news on market prices by looking at activity on the micro-blogging platform Twitter surrounding the #bigotgate scandal during the 2010 UK General Election, and subsequent movements of betting prices on a prominent betting exchange, Betfair. We find that the response of market prices appears sluggish, as over a thousand tweets are sent before any price movement is registered (despite trading taking place). However, this slow movement appears to be explained by the need for corroborating evidence via more traditional forms of media; once important Tweeters begin to Tweet, once hyperlinks are added to Tweets, and once television and radio news bulletins begin, prices begin to move.

Keywords: information and market ffciency; gambling; political elections (search for similar items in EconPapers)
JEL-codes: D72 G14 L83 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2014-11-25
New Economics Papers: this item is included in nep-mst and nep-pol
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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