I think we’re going to see betting markets drop in prominence after this election. They’re a great example of Goodhart’s Law:
When a measure becomes a target, it ceases to be a good measure
Betting markets are great when everyone is trying to maximize profit. But once they become political, true believers will try to influence the outcome by affecting the betting market itself, even if they lose money on it. For example from the article:
A recent article in the Wall Street Journal about a crypto-based prediction market Polymarket that made it look like Trump had a 62% chance of winning. CNBC reported that a single trader from France was moving the market by betting more than $28 million that Trump would win.
The markets have pretty tightly correlated with polling based models.
They have been historically. I think they may not going forward though. Mostly because now that it’s “a thing” you’re going to have a lot of people trying to screw around with it that don’t mind losing money, which makes betting markets irrational
terminally online techbros with too much money are leaning towards the fascist clownhole? You don’t say.
