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Mantic Monday 1/29/24 - by Scott Alexander

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And Johnson chronicles other problems with them. For example, long after the media called the 2020 election for Biden, PredictIt held on to a ~9% chance of a Trump landslide so massive it could not possibly have occurred even if he won all of his voting fraud challenges. Betting sites favored Biden to win all swing states, but Trump to win overall. The whole thing was a mess. Johnson makes a pretty reasonable guess about the cause: lots of dumb money. People use their pocketbooks to root for their favorite candidate. Normally in a functioning market smart money would take the other side and set the final price, but the high transaction costs, long waits, and regulatory limits on prediction markets mean it’s not generally worth smart money’s time to correct the mispricing; Goldman Sachs isn’t going to hire statistics PhDs to make a model just so they can bet $850 on PredictIt. All of this is true, so let me say a few words in prediction market’s defense. First of all, my allegiance has

Mantic Monday 1/29/24 Election problems // Trump odds // AI worlds Scott Alexander Jan 30, 2024 77 228 8 Share Do Prediction Markets Have An Election Problem? This is the claim of an article by Jeremiah Johnson in Asterisk Magazine . The key graphic is this: Original source: First Sigma , who remind us that this is just one election cycle and we shouldn’t update too hard on it. The two real-money prediction markets get 4th and 6th place. And Johnson chronicles other problems with them. For example, long after the media called the 2020 election for Biden, PredictIt held on to a ~9% chance of a

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