Mean Reversion in Prediction Markets

The question

After a market moves unusually hard, does the probability tend to give part of it back, or keep going? Reversion follow-through measures exactly this over collected history: for every |Z| ≥ 2 unusual move, the next window is checked for partial retracement.

Reading the numbers

Partial reversion rate is the share of unusual moves that reversed direction in the following window. Avg move given back is how much of the typical move retraced — a negative value means moves on balance kept extending.

What is excluded, and why

Pinned markets, post-event sports contracts, and terminal resolution moves are excluded: a game ending is not an overreaction. Base rates only display once enough comparable events exist; until then the panel says so plainly.

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