FOR over a year, the prediction market site Intrade offered a
contract on whether the Supreme Court would rule the Obamacare's
individual mandate unconstitutional by the end of 2012. For most
of its life, the contract traded below $5; the collective wisdom
of the market suggested the mandate would stand. In late March,
however, a surge of public scepticism about the Court's
tolerance for the mandate led to an impressive jump in the
price. By the eve of the Court's ruling, the market put the odds
that it would be struck down at nearly 80%. Then the fateful day
arrived—and on word that Chief Justice Roberts voted to uphold
the mandate as a tax the contract instantly plummeted to near
zero. So much for the wisdom of the markets, right?  Not quite,
says a new NBER working paper by Erik Snowberg, Justin Wolfers,
and Eric Zitzewitz. Their research sets out to show how
prediction markets can provide the best available estimates of
future events and figures. Yet while the paper argues strongly
for the utility of mark