“polymarket prices sum to more than a dollar, and the overround tracks the bid-ask spread”
Polymarket's negative-risk markets, where one contract per outcome settles at exactly $1, make Arrow–Debreu state prices observable. Across 146 daily closes on the June 2026 FOMC decision and 304 on the 2024 election, state prices sum to 1.015-1.017 - an overround the size of quoted half-spreads that shrinks toward resolution. Normalized prices carry two to five times the variance on FOMC and jobs days; once timestamps align to the US trading calendar, no lead-lag with Treasuries, the S&P, VIX or Bitcoin survives.
Extensive technical background assumed
Platforms mentioned: Polymarket