If you want to know how the US presidential race is going, all you need to do is check the latest prices in the political prediction markets. The same is true of sports results. And it is true if you want to know how much a new film will gross on its first weekend.

These are bold claims but they are robust. Justin Wolfers, an economist at the Wharton School in Philadelphia, has devoted himself to studying prediction markets – from spread betting to futures markets – and contends they are that powerful.