Lewis Libby (66%) Guilty

Price for Lewis (Scooter) Libby Charges at intrade.com

While Scott may not be “100% sold on either side” of the Libby trial, two-thirds of traders on the prediction markets think that he will be found guilty of lying on at least one charge against him. This is a notable upswing from last June, when I wrote about the market and its intricacies. I then pointed out that prices for these “conviction contracts” include a discount for the likelihood of a plea, so that in the months before trial, prices for conviction are likely to be depressed. I think that the rise in the price of Libby’s conviction stock demonstrates the point. Although there were few surprises at trial, traders raised the likelihood of conviction by over 20% after it began, representing the end of the plea discount and the market’s real estimation of the likelihood of conviction. Notably, traders don’t seem to think that a mistrial is terribly likely, although the likelihood of conviction has decreased from 75% at the beginning of the jury’s deliberations.

For what it is worth, I tend to agree with Scott that the length of the jury’s deliberations is a mark of seriousness and worth. If we wanted a quick and summary answer, we wouldn’t use a jury, we’d flip a coin.

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5 Responses

  1. Dan Markel says:

    I’ve got to think the markets are screwed up on this. My somewhat informed guess is that we’re looking at an acquittal or a hung jury on most counts. At this point, conviction seems very unlikely. (And, no, I’m not trying to move the prediction market with my statement. I’ve been losing enough the last few days in the regular equity markets to keep me chastened…)

  2. Scott Moss says:

    Re flipping a coin: when I was a district court clerk, my co-clerk and I had a running joke about what we should say to (the surprisingly many) lawyers who call up to ask (really complain) about when their motion will be decided. The only answer we were authorized to give, of course, was that we have no answer. What I really wanted to say was, “oh, if you’d like, I can tell you about our Expedited Motion Decision Procedure.” “Sure, what’s that,” they’d then say. “Well,” I’d respond, “the party that makes the request gets a decision on the motion in one day — and that party loses the motion.” I kept offering to buy my co-clerk lunch if she’d use that line, but for some reason she never took me up on the offer.

  3. Misreading the market says:

    Yes, but 66% is only clear and convincing, and Fitzgerald needs at least 95%, or beyond a reasonable doubt.

  4. Bruce Boyden says:

    In related news, Libby’s cat is 50% dead.

  5. Dan Markel says:

    Jury Finds Libby Guilty on 4 of 5 Counts

    Oh well, I guess the prediction markets are doing better than I am…