Augur Weekly - Expert Political Trader Shares His Iowa Predictions & 538 vs. Markets
A Look at the Week in Political Betting, Augur News, and More
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Election Betting Roundup
Nate Silver, political pundit behind the data-centric blog, 538, has a history of dragging prediction markets for their forecasting aptitude relative to his:
Well, a number of people are taking exception to these, erm, playful barbs? Most notably, Flip Pidot, formerly of PredictIt, and Rutgers professor, Harry Crane, took to recording an episode of Flip’s show, Old Bull TV to discuss models vs. markets. Crane emphasizes that skin in the game and a number of other factors tip the forecasting supremacy to markets (Bonus: See a sneak preview of the next episode of Old Bull TV featuring Augur co-founder, Joey Krug).
The upcoming state contests will be interesting to watch in the context of models vs. markets. As Sophie Hill notes below, there is a strong divergence between 538 and PredictIt on Bernie and Biden’s relative chances in Iowa.
Further, you can see below each candidate’s respective chances at winning Iowa, as appraised by 538’s model versus their corresponding PredictIt prices:
As we approach the first state contest, the Iowa Caucus, it’s as good of a time as any to get opinions on the Democratic Nomination field from one of the more public-facing political traders.
“Iowa is about momentum, Iowa is about surpassing expectations and Iowa is about failing to meet expectations. Iowa is about the media narrative. The delegates won from Iowa are unlikely to matter in the end and are not a substantial number in any event.”
Jason Pipkin knows his stuff. You can see his trade diary for the DemNom market featuring over 10k trades and $7,100 in profit. On Jason’s blog, Predicting Politics, he details the case for each candidate to take Iowa:
Bernie:“Bernie wins Iowa when Liz continues to fall and caucusgoers attending precincts where she isn’t viable and can’t become viable mainly go to him.”
Biden:“Joe Biden wins Iowa because polls like Suffolk are right, because older voters who support him but didn’t say they would caucus end up turning out anyway, because Liz stays strong enough to keep Bernie from running away with all her delegates…”
Pete:“Pete Buttigieg doesn’t win Iowa.”
Warren:“Warren wins Iowa because she has a great ground game, the NYT and DMR endorsements matter (lol) and because Bernie softens in the final week of polling.”
In an earlier post on Predicting Politics, Jason details the game theory behind trading each candidate post-Iowa depending on the results:
A Clear Winner, A Striking-Distance Second, Distant Third and Fourth
Candidate A – 40%
Candidate B – 30%
Candidates C,D – 9-15%
If Candidate A is Bernie – max Bernie in NH, obviously, and take him out for a spin in NV and SC (but if B is Joe, don’t hold those SCs). B here is either Pete or Joe – if it’s Pete honestly I’d probably just max Bernie everywhere and call it. If it’s Joe, then Pete is done and Liz has the barest of chances remaining. Regardless, you’re max betting against C and D here almost no matter what.
Bonus: Pipkin on the Star Spangled Gamblers podcast discussing early primary states.
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