alt Hacker NewsIt's useful for things like elections, where though popular media might push one line of thought primarily, the markets will adjust to be closer to the reality. Pretty visible in the 2024 elections where if you followed mainstream media at all, you probably wouldn't realize the markets had Trump at a 60% chance to win just before the election.
But for so many things, there's just too many sources of insider info. Reality television especially, the last couple seasons of Survivor have been clearly leaked if you look at a prediction market. And since all of production knows, and obviously all the players know, someone tells their family members, and all of a sudden you have a few hundred people who know for sure who will win.
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> It's useful for things like elections, where though popular media might push one line of thought primarily, the markets will adjust to be closer to the reality. Pretty visible in the 2024 elections where if you followed mainstream media at all, you probably wouldn't realize the markets had Trump at a 60% chance to win just before the election.
But what exactly is the use of that? And as another example from the 2024 elections, every media outlet was pushing the validity of some stupid Iowa poll that only insiders even knew about, and was obviously just a random survivor that happened to get a few things right in a row. The prediction of a Harris landslide entirely flipped the odds in the prediction markets; if you had insider knowledge about that poll, you would have been able to make a fortune. If you had helped market that poll, you could have made a fortune.
The problem with prediction markets as predictors I think is that that they assume there will be a lot of insiders, rather than a very few. It gets confused with normal price discovery in a large, diverse and competitive market. Instead, prediction markets just match the (opinion) x (perceived trustworthiness) of the media landscape. If anything, insiders have a motivation to push the markets to be more inaccurate. They want to bet against them.
edit: but to restate my initial question - what's the use of polls that converge to the correct answer about 10 seconds before the actual votes come in? I asked the same thing when people were lusting over Nate Silver, and I still haven't gotten an answer. I understand using polls to guide your election expenditures; I do not understand the intense interest in them among spectators, or when the election is already mostly run.
>It's useful for things like elections, where though popular media might push one line of thought primarily, the markets will adjust to be closer to the reality. Pretty visible in the 2024 elections where if you followed mainstream media at all, you probably wouldn't realize the markets had Trump at a 60% chance to win just before the election.
How did that number more greatly reflect reality than the polls?
The 2024 prediction market had like several large bettors on the Trump side https://www.bloomberg.com/news/features/2024-10-25/polymarke.... The Harris side had no equivalent counter-whales. So the ~60% Trump prediction was not really reflecting reality, more-so individual conviction. A more retail-only market would likely have priced it closer to 52–55% Trump, which matches with what the pollsters and mainstream media said.