Electability of 2016 Presidential Candidates as Implied by Betting Markets

#1

Post by lil_tee » Tue, Sep 15, 2015, 12:47 PM UTC

Electability of 2016 Presidential Candidates as Implied by Betting Markets
toddwschneider.com

Re: Electability of 2016 Presidential Candidates as Implied by Betting Markets

#2

Post by vixen99 » Tue, Sep 15, 2015, 2:06 PM UTC

How depressing that a country of 300+ million individuals has candidates from the same families again and again.

Re: Electability of 2016 Presidential Candidates as Implied by Betting Markets

#3

Post by jahnu » Tue, Sep 15, 2015, 2:07 PM UTC

vixen99 wrote: post #2

How depressing that a country of 300+ million individuals has candidates from the same families again and again.

Well, with democracy at least it doesn't take a war to change them....

... um....

Re: Electability of 2016 Presidential Candidates as Implied by Betting Markets

#4

Post by uptown » Tue, Sep 15, 2015, 2:13 PM UTC

vixen99 wrote: post #2

How depressing that a country of 300+ million individuals has candidates from the same families again and again.

Quora: "Are all the U.S. Presidents related to each other?"

https://www.quora.com/Are-all-the-U-S-Presidents-related-to-...

Re: Electability of 2016 Presidential Candidates as Implied by Betting Markets

#5

Post by kittenfluff » Tue, Sep 15, 2015, 2:16 PM UTC

Interestingly, with Joe Biden in the range (10%, 13.5%) to win the nomination, and (7.7%, 8.3%) to win the Presidency, the lowest his electability could be is

    7.7% / 13.5% = 57%

and the highest it could be is

    8.3% / 10.0% = 83%

so the market seems to be pricing a probability in the range of (57%, 83%) for Biden to be elected president if he won the nomination - compared to Hillary Clinton's range of (56.9%, 57.7%)

I can think of a few explanations -

1. Biden really is a lot more electable than Hillary Clinton

2. Both candidates have electability at the low end of their range (around 57%).

3. The market is wrong, i.e. they are systematically underrating Biden's chance of winning the nomination (and overrating Clinton's) or overrating Biden's chance of winning the election (and underrating Clinton's) or both.

There is no arbitrage, but if you believe 3, there might be a good profit to be made in expectation by backing Biden to win the election, but Clinton to win the presidency (you wouldn't hold it through to 2016, but take off the bet as soon as the odds come back to something that looks more plausible).

I haven't done the analysis to see if it's still worth it after trading costs, but maybe someone else wants to.

Re: Electability of 2016 Presidential Candidates as Implied by Betting Markets

#6

Post by saturdaysaint » Tue, Sep 15, 2015, 2:21 PM UTC

I don't know if this has any special significance, but I think the number of FB/Twitter followers for the current frontrunners are interesting. I'll use Facebook numbers.

Hillary Clinton - 1.3 million

Jeb Bush - .26 million

Donald Trump - 3.7 million

Joe Biden - .85 million

Bernie Sanders - 1.4 million

Marco Rubio - .99 million

John Kasich - .14 million

Scott Walker - .36 million

Ben Carson - 2.88 million

No, I don't think that Donald Trump is the runaway favorite for president. On the other hand, a look at these would make Walker's collapse and Bush's struggles (despite a goliath $100 million warchest) less of a surprise than the political press has portrayed. Likewise, Sanders' challenge to Clinton would be less surprising.

Bush is the real surprise to me. Endorsements and dollars show that he's the establishment's pick, but people just aren't interested in the guy. It would be kind of amazing if someone went from having a D-list celebrity following to sitting in the oval office in a little over a year.

Re: Electability of 2016 Presidential Candidates as Implied by Betting Markets

#7

Post by jerf » Tue, Sep 15, 2015, 2:35 PM UTC

uptown wrote: post #4

vixen99 wrote: post #2

How depressing that a country of 300+ million individuals has candidates from the same families again and again.

Quora: "Are all the U.S. Presidents related to each other?" https://www.quora.com/Are-all-the-U-S-Presidents-related-to-...

Followed link, turns out all but one President can be traced to... King John, the one in the Robin Hood story, born December 24, 1166.

Which in practical terms translates to "no", they are not related.

Re: Electability of 2016 Presidential Candidates as Implied by Betting Markets

#8

Post by impostervt » Tue, Sep 15, 2015, 2:35 PM UTC

I'd be curious to see Electability numbers given scenarious of one candidate v another. For instance, 'Clinton v Bush', 'Sanders v Trump'.

Re: Electability of 2016 Presidential Candidates as Implied by Betting Markets

#9

Post by matwood » Tue, Sep 15, 2015, 2:37 PM UTC

vixen99 wrote: post #2

How depressing that a country of 300+ million individuals has candidates from the same families again and again.

Actually the rise of Trump, Carson, and to a lesser extend Fiorina shows that people are tired of the professional politician. Even if Bush or Clinton were the best candidates (I don't think they are), they look to be facing a huge headwind of people tired of the Bushs and Clintons.

Re: Electability of 2016 Presidential Candidates as Implied by Betting Markets

#10

Post by matwood » Tue, Sep 15, 2015, 2:41 PM UTC

kittenfluff wrote: post #5

Interestingly, with Joe Biden in the range (10%, 13.5%) to win the nomination, and (7.7%, 8.3%) to win the Presidency, the lowest his electability could be is 7.7% / 13.5% = 57% and the highest it could be is 8.3% / 10.0% = 83% so the market seems to be pricing a probability in the range of (57%, 83%) for Biden to be elected president if he won the nomination - compared to Hillary Clinton's range of (56.9%, 57.7%) I…

This makes a lot of sense. I see Biden as much more electable than Clinton mainly because Clinton will draw out the 'hate Clinton' crowd to vote against her. I think the DNC is also realizing this, hence all the talk of Biden jumping in to begin with.