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Prediction markets have an elections problem

asteriskmag.com

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Re: Prediction markets have an elections problem

#101

Post by MostlyStable »

n2d4 wrote: post #90
neilkk wrote: post #77

Earlier quoted context omitted.

The implied probability of Brexit a few days before was around 25%. The implied probability of Trump beating Clinton a few days before was around 20%. Neither the time value of money nor the cost of trading explain these dislocations.

If anything then that means that they work! Situations with a 25% chance do occur sometimes! If prediction markets show 75% odds and are right 3/4 times, they are doing their job well - if they show 75% odds and right 4/4 times, they are doing their job badly! Meanwhile, both polls and analysts got those elections completely wrong, much more so than prediction markets. (IIRC, 538 was the only outlet that gave Trump a…

538 got screwed in both directions: before the election they were derided for having Trump too high. After the election they were lambasted for "only" giving him 20-30% chance.

Re: Prediction markets have an elections problem

#102

Post by NotSuspicious »

> But instead, the majority of the bettors against Biden bet on the astonishing outcome of “Trump wins by 280+ electoral votes.” That, it should be clear, was impossible — it would require results to be overturned not just in states with tight races but also in Democratic bellwethers like California.

That was not impossible at all once you take into account Trump's VP certification plan, which many people understood very early on. A longshot, yes, but certainly not impossible.

If anything, the prediction markets priced in an insurrection better than any pundit I recall watching. To flip it around and call prediction markets "irrational" in this situation is misguided and ignorant of political history.

Re: Prediction markets have an elections problem

#103

Post by [deleted] »

mattmaroon wrote: post #67

I am a former professional gambler and now I don’t gamble much, because I have neither the time nor interest to find good wagers, but what I do is on predictit. Being a great gambler mostly means not gambling until you have an edge, and what he says about and market being less accurate than 538 is true in my experience. I’ve been betting on there every couple years for maybe ten or so, it’s held up well. As many ment…

[deleted]

Re: Prediction markets have an elections problem

#104

Post by banannaise »

Happy to see that the article gets there eventually, but it's buried pretty deep: People betting on Donald Trump to win the election he had just lost weren't actually betting money. They were spending it.

They are saying "I will spend $,000 just to show that I support Trump to the point where I [pretend to] believe him when he says he won the election [that he clearly just lost]". It's MAGA culture's way of - wait for it - virtue signaling.

And the prediction market is just vacuuming up most of that money for themselves. You can bet against it for a nominal profit, but you're paying the vig to do it, and the vig is a big chunk when the odds are sitting at 9:1.

Re: Prediction markets have an elections problem

#106

Post by ajross »

efitz wrote: post #65

The example the author gives is the 2020 election. Without rehashing anything or endorsing anyone’s viewpoint, there were lots of issues being raised, lots of court cases in flight, and possible procedural issues in the states and in the Congress related to electors and certification. The election wasn’t “over” until certification happened (late) on January 6. Why should bettors be prohibited from continuing to bet?…

> Many ppl here may be too young to remember 2000 where recounts kept going on and on in Florida and the Supreme Court intervened.

FWIW, Gore conceded after 36 days within hours of the release of the SCOTUS decision.

Re: Prediction markets have an elections problem

#107

Post by nostromo »

laidoffamazon wrote: post #22
pessimizer wrote: post #16

Earlier quoted context omitted.

Elections have nothing to do with presidential succession. It will be a party decision, Harris is a guaranteed loss, and M. Obama is a possible win.

This is, again, a conspiratorial mindset considering Michelle Obama has repeatedly said she would never run and Kamala Harris would never be replaced.

Politicians always say that. Obama himself denied wanting to run for president repeatedly right up until he announced his run for president.

Re: Prediction markets have an elections problem

#108

Post by Mountain_Skies »

powerbroker wrote: post #98

Am I the only one who notices this article professes to be published _February_ 2024, as I read it on January 29, 2024? It seems like a mistake a time traveler would make... who doesn't care enough to fix their mistakes.

That was extremely common with print magazines when those still existed in large numbers. Maybe still is common but it's been at least a decade since I last purchased one.

Re: Prediction markets have an elections problem

#109

Post by ummonk »

The article briefly mentions causes for market inefficiency such as the time value of money and platform fees, but then inexplicably goes on to ignore them as potential reasons for inefficient markets.

Plenty of arbitrage opportunities exist on PredictIt that can’t be taken advantage of either because the platform’s cut of any profit you make on a bet will negate the arbitrage or because resolution is so far off that it would be more profitable to just invest in a CD.

Re: Prediction markets have an elections problem

#110

Post by bluedays »

mattmaroon wrote: post #67

I am a former professional gambler and now I don’t gamble much, because I have neither the time nor interest to find good wagers, but what I do is on predictit. Being a great gambler mostly means not gambling until you have an edge, and what he says about and market being less accurate than 538 is true in my experience. I’ve been betting on there every couple years for maybe ten or so, it’s held up well. As many ment…

How does that work? Being a professional gambler, I mean. I'd love to know more about this.
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