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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:

Nate Silver @NateSilver538

@BrendanNyhan @DavMicRot We think we have a massive edge though in constructing topline odds and probability distributions when it comes to the complex stuff—overall odds on the Electoral College, the House the Senate and various parlays therein. We've consistently kicked PredictIt's ass on those.

November 7th 2018

1 Retweet17 Likes

Nate Silver @NateSilver538

@HarryDCrane @JustinWolfers There have been many betting market vs 538 studies, and their conclusions are inconclusive. Sometimes 538 is little better, sometimes the markets are. That's a TERRIBLE result for prediction markets. It means they add no marginal value relative to 538, which is public and free.

November 7th 2018

1 Retweet12 Likes

Nate Silver @NateSilver538

@ForecasterEnten BeTtInG mArKeTs AgGrEgAtE iNfOrMaTiOn FrOm ThoSaNdS oF wEiRd PeOpLe aCcRoSs EuRoPe WhO pUt SmAlL aMoUnTs Of MoNeY oN tHe LiNe BeTtInG oN tHe OuTcOmE oF aMeRiCaN pOlItIcAl EvEnTs. HaRd To SeE hOw YoU bEaT tHe WiSdOm Of CrOwDs.

March 18th 2019

22 Retweets462 Likes

Nate Silver @NateSilver538

@DougPolkPoker Many people who trade on PredictIt are dumb as fuck and the market isn't robust enough to make them pay a real price for being dumb as fuck.

November 8th 2019

21 Retweets438 Likes

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.

Sophie Hill @sophie_e_hill

Iowa caucus predictions: @FiveThirtyEight has Sanders and Biden tied, while @PredictIt has Sanders trading 2x Biden!...

January 28th 2020

2 Likes

Further, you can see below each candidate’s respective chances at winning Iowa, as appraised by 538’s model versus their corresponding PredictIt prices:

Predicting Iowa

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

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%

Betting action:

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.

Coming soon in Q1 2020, Augur will be the only platform for political betting with no limits, the best odds, and the lowest fees.

Join the waitlist!

Around the Ecosystem

• Augur v2 Bug Bounty Program. The Forecast Foundation is seeking the community’s help in finding bugs and vulnerabilities prior to deployment. Critical bugs pay $25k.
  

• Augur’s Flippening. Ben Davidow of The Augur Edge details the effects of liquidity at both extremes, its exponential nature, and how it relates to Augur v2.
  

• Sports Betting Markets & Crypto Market Thoughts w/ Pantera CIO Joey Krug.

• Guesser Superbowl Market.

  

• Guesser Iowa Market.

  

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Augur v2 Transition Update

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