Prediction Markets, Twitter and Bigotgate

We consider the impact of breaking news on market prices by looking at activity on the micro-blogging platform Twitter surrounding the #bigotgate scandal during the 2010 UK General Election, and subsequent movements of betting prices on a prominent betting exchange, Betfair. We find that the response of market prices appears sluggish, as over a thousand tweets are sent before any price movement is registered (despite trading taking place). However, this slow movement appears to be explained by the need for corroborating evidence via more traditional forms of media; once important Tweeters begin to Tweet, once hyperlinks are added to Tweets, and once television and radio news bulletins begin, prices begin to move.