As of Thanksgiving Day, PredictIt’s market in the Oregon 2022 Governor’s election contained price discrepancies in the “Best Buy” Republican and Democrat contracts.
PredictIt offers binary option contracts: an event either happens or does not happen (Yes or No). A “winning” prediction receives $1/share, and a “losing” share receives nothing. PredictIt traders can buy “Yes” or “No” shares on which party (defined as “Democratic” or “Republican”) will win the 2022 Oregon Gubernatorial election. The prices correspond with the probability of that contract’s predicted outcome becoming true.
The Democratic “bestBuyYesCost” (the lowest price to buy one “Yes” share) should be equivalent to the Republican “bestBuyNoCost” (the lowest price to buy one “No” share), and vice versa. However, the market has a 9-cent discrepancy between Democratic-Yes and Republican-No, and a 6-cent discrepancy between Republican-Yes and Democratic-No. Both price discrepancy favored the “No” contracts:
| Contract | bestBuyYesCost | bestBuyNoCost |
| Democratic | 70 cents | 31 cents |
| Republican | 25 cents | 79 cents |
One explanation is that due to the relatively low volume of trading, the market hasn’t reached equilibrium. The total volume (8,811 shares traded) of the 2022 Oregon Gubernatorial Election is roughly 1% of the shares traded so far in the market for the 2024 Presidential Election (738,210).
Another explanation is that Betsy Johnson is beginning to move the market. While most media coverage has gone to the candidacy of former New York Times columnist Nicholas Kristof, Johnson is the proverbial elephant in the room (even if she is a Democrat).
Betsy Johnson is a Democratic State Senator running as a “Nonaffiliated” candidate for Governor. While independent candidates have a bad track record in America’s two-party system, Johnson has several things going for her in this campaign:
- Johnson is currently the fundraising leader.
- Nine Democrats and 13 Republicans have filed, and neither primary has a run-off.
- Republicans have not won a Gubernatorial race in Oregon since 1982.
- Incumbent Democratic Governor Kate Brown is the most unpopular Governor in America, but also term-limited.
With PredictIt only offering “Yes” or “No” contracts on the Democratic and Republican party candidates winning the Oregon Governor’s race, the market could be accounting for Johnson through the “No” contract prices of both parties. It’s too far out for anything other than speculation about Betsy Johnson’s chances next November, but it is reasonable for her to be attractive (or reasonable for her making the two major parties less attractive) to PredictIt gamblers.