5.08.2012

The Avengers, Or: The Rising Tide Lifts All Ships

Earlier today I posted a brief piece on how prediction markets were responding to the Hollande presidential victory in France. The conclusion was that despite campaign promises which, if fulfilled, would seem to put the fragile state of the European Union in jeopardy, that people were betting on the status quo. Very low odds of defaults, losses of credit ratings, or the downfall of the Euro were the norm. However, things got a little more interesting when I took a look at a few bets on Hollywood.

All Lord of the Rings fans will be aware that Tolkien's related classic The Hobbit is coming to a big screen near you during Christmas season this year. And, after The Avengers broke box office records over the weekend, folks on prediction markets priced a big opening-weekend for the Middle Earth tale far higher. Markets were higher on movies such as the next installment of the Batman franchise and the next Twilight movie as well. I guess, to slightly adapt the cliche in the title, a rising box office lifts all blockbusters...

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