Biden will die or otherwise withdraw from the race with 23% likelihood
Biden will fail to be the Democratic nominee for whatever reason at 13% likelihood
either Biden or Trump will fail to win nomination at their respective conventions with 14% likelihood
Biden will win the election with only 34% likelihood
Even if gas fees take a few percentage points off we should expect to make money trading on some of this stuff, right (the money is only locked up for 5 months)? And maybe there are cheap ways to transfer into and out of Polymarket?
Probably worthwhile to think about this further, including ways to make leveraged bets.
I think the FiveThirtyEight model is pretty bad this year. This makes sense to me, because it’s a pretty different model: Nate Silver owns the former FiveThirtyEight model IP (and will be publishing it on his Substack later this month), so FiveThirtyEight needed to create a new model from scratch. They hired G. Elliott Morris, whose 2020 forecasts were pretty crazy in my opinion.
Here are some concrete things about FiveThirtyEight’s model that don’t make sense to me:
There’s only a 30% chance that Pennsylvania, Michigan, or Wisconsin will be the tipping point state. I think that’s way too low; I would put this probability around 65%. In general, their probability distribution over which state will be the tipping point state is way too spread out.
They expect Biden to win by 2.5 points; currently he’s down by 1 point. I buy that there will be some amount of movement toward Biden in expectation because of the economic fundamentals, but 3.5 seems too much as an average-case.
I think their Voter Power Index (VPI) doesn’t make sense. VPI is a measure of how likely a voter in a given state is to flip the entire election. Their VPIs are way to similar. To pick a particularly egregious example, they think that a vote in Delaware is 1/7th as valuable as a vote in Pennsylvania. This is obvious nonsense: a vote in Delaware is less than 1% as valuable as a vote in Pennsylvania. In 2020, Biden won Delaware by 19%. If Biden wins 50% of the vote in Delaware, he will have lost the election in an almost unprecedented landslide.
I claim that the following is a pretty good approximation to VPI: (probability that the state is the tipping state) * (number of electoral votes) / (number of voters). If you use their tipping-point state probabilities, you’ll find that Pennsylvania’s VPI should be roughly 4.3 times larger than New Hampshire’s. Instead, FiveThirtyEight has New Hampshire’s VPI being (slightly) higher than Pennsylvania’s. I retract this: the approximation should instead be (tipping point state probability) / (number of voters). Their VPI numbers now seem pretty consistent with their tipping point probabilities to me, although I still think their tipping point probabilities are wrong.
The Economist also has a model, which gives Trump a 2⁄3 chance of winning. I think that model is pretty bad too. For example, I think Biden is much more than 70% likely to win Virginia and New Hampshire. I haven’t dug into the details of the model to get a better sense of what I think they’re doing wrong.
On the one hand, Nate Silver’s model now gives Trump a ~30% chance of winning in Virginia, making my side of the bet look good again.
On the other hand, the Economist model gives Trump a 10% chance of winning Delaware and a 20% chance of winning Illinois, which suggests that there’s something going wrong with the model and that it was untrustworthy a month ago.
That said, betting markets currently think there’s only a one in four chance that Biden is the nominee, so this bet probably won’t resolve.
Looks like this bet is voided. My take is roughly that:
To the extent that our disagreement was rooted in a difference in how much to weight polls vs. priors, I continue to feel good about my side of the bet.
I wouldn’t have made this bet after the debate. I’m not sure to what extent I should have known that Biden would perform terribly. I was blindsided by how poorly he did, but maybe shouldn’t have been.
I definitely wouldn’t have made this bet after the assassination attempt, which I think increased Trump’s chances. But that event didn’t update me on how good my side of the bet was when I made it.
I think there’s like a 75-80% chance that Kamala Harris wins Virginia.
Probably no longer willing to make the bet, sorry. While my inside view is that Harris is more likely to win than Nate Silver’s 72%, I defer to his model enough that my “all things considered” view now puts her win probability around 75%.
I have previously bet large sums on elections. Im not currently placing any bets on who will win the election. Seems too unclear to me (note I had a huge bet on biden in 2020, seemed clear then). However there are TONS of mispricings on polymarket and other sites. Things like ‘biden will withdraw or lose the nomination @ 23%’ is a good example.
Polymarket has gotten lots of attention in recent months, but I was shocked to find out how much inefficency there really is.
There was a market titled “What will Trump say during his RNC speech?” that was up a few days ago. At 7 pm, thetranscriptfor the speech was leaked, and you could easily find it by a google search or looking at the polymarket discord.
Trump started his speech at 9:30, and it was immediately that he was using the script. One entire hour into the speech I stumbled onto the transcript on Polymarkets discord. Despite the word “prisons” being in the leaked transcript that Trump was halfway through, Polymarket only gave it a 70% chance of being said. I quickly went to bet and made free money.
To be fair it was a smaller market with 800k in bets, but nonetheless I was shocked on how easy it was to make risk-free money.
Biden not being the democratic nominee at 13% while EITHER Biden or Trump not being their respective nominees at 14% implies a 1% chance that Trump won’t be the Republican nominee. There’s clearly an arbitrage there. Whether it merits the costs (gas, risk of polymarket default, lost opportunity of the escrowed wager) I have no clue.
Betting against republicans and third parties on poly is a sound strategy, pretty clear they are marketing heavily towards republicans and the site has a crypto/republican bias. For anything controversial/political, if there is enough liq on manifold I generally trust it more (which sounds insane because fake money and all).
That being said, I don’t like the way Polymarket is run (posting the word r*tard over and over on Twitter, allowing racism in comments + discord, rugging one side on disputed outcomes, fake decentralization), so I would strongly consider not putting your money on PM and instead supporting other prediction markets, despite the possible high EV.
Feel free to write a post if you find something worthwhile. I didn’t know how likely the whole Biden leaving the race thing was so 5% seemed prudent. At those odds, even if I belief the fivethirtyeight numbers I’d rather leave my money in etfs. I’d probably need something like >>1,2 multiplier in expected value before I’d bother. Last year when I was betting on Augur I was also heavily bitten by gas fees (150$ transaction costs to get my money back because gas fees exploded for eth), so would be good to know if this is a problem on polymarket also.
These predictions, of course, are obviously nonsensical. If I had to guess, it’s a combination of: many crypto users being right-wing and the media they consume has convinced them that this is more likely than it would be in reality, and climbing crypto prices discouraging betting leading to decreased accuracy.
I’ll say that the climbing value of the currency as well as gas fees makes any prediction unwise, unless you believe you have massive advantage over the market. I’d personally pass on it, but other people are free to proceed with their money.
FiveThirtyEight released their prediction today that Biden currently has a 53% of winning the election | Tweet
The other day I asked:
Probably worthwhile to think about this further, including ways to make leveraged bets.
I think the FiveThirtyEight model is pretty bad this year. This makes sense to me, because it’s a pretty different model: Nate Silver owns the former FiveThirtyEight model IP (and will be publishing it on his Substack later this month), so FiveThirtyEight needed to create a new model from scratch. They hired G. Elliott Morris, whose 2020 forecasts were pretty crazy in my opinion.
Here are some concrete things about FiveThirtyEight’s model that don’t make sense to me:
There’s only a 30% chance that Pennsylvania, Michigan, or Wisconsin will be the tipping point state. I think that’s way too low; I would put this probability around 65%. In general, their probability distribution over which state will be the tipping point state is way too spread out.
They expect Biden to win by 2.5 points; currently he’s down by 1 point. I buy that there will be some amount of movement toward Biden in expectation because of the economic fundamentals, but 3.5 seems too much as an average-case.
I think their Voter Power Index (VPI) doesn’t make sense. VPI is a measure of how likely a voter in a given state is to flip the entire election. Their VPIs are way to similar. To pick a particularly egregious example, they think that a vote in Delaware is 1/7th as valuable as a vote in Pennsylvania. This is obvious nonsense: a vote in Delaware is less than 1% as valuable as a vote in Pennsylvania. In 2020, Biden won Delaware by 19%. If Biden wins 50% of the vote in Delaware, he will have lost the election in an almost unprecedented landslide.
I claim that the following is a pretty good approximation to VPI: (probability that the state is the tipping state) * (number of electoral votes) / (number of voters). If you use their tipping-point state probabilities, you’ll find that Pennsylvania’s VPI should be roughly 4.3 times larger than New Hampshire’s. Instead, FiveThirtyEight has New Hampshire’s VPI being (slightly) higher than Pennsylvania’s.I retract this: the approximation should instead be (tipping point state probability) / (number of voters). Their VPI numbers now seem pretty consistent with their tipping point probabilities to me, although I still think their tipping point probabilities are wrong.The Economist also has a model, which gives Trump a 2⁄3 chance of winning. I think that model is pretty bad too. For example, I think Biden is much more than 70% likely to win Virginia and New Hampshire. I haven’t dug into the details of the model to get a better sense of what I think they’re doing wrong.
FWIW the polling in Virginia is pretty close—I’d put my $x against your $4x that Trump wins Virginia, for x ⇐ 200. Offer expires in 48 hours.
I’d have to think more about 4:1 odds, but definitely happy to make this bet at 3:1 odds. How about my $300 to your $100?
(Edit: my proposal is to consider the bet voided if Biden or Trump dies or isn’t the nominee.)
Could we do your $350 to my $100? And the voiding condition makes sense.
Yup, sounds good! I’ve set myself a reminder for November 9th.
Have recorded on my website
Update for posterity: Nate Silver’s model gives Trump a ~1 in 6 chance of winning Virginia, making my side of this bet look bad.
Further updates:
On the one hand, Nate Silver’s model now gives Trump a ~30% chance of winning in Virginia, making my side of the bet look good again.
On the other hand, the Economist model gives Trump a 10% chance of winning Delaware and a 20% chance of winning Illinois, which suggests that there’s something going wrong with the model and that it was untrustworthy a month ago.
That said, betting markets currently think there’s only a one in four chance that Biden is the nominee, so this bet probably won’t resolve.
Looks like this bet is voided. My take is roughly that:
To the extent that our disagreement was rooted in a difference in how much to weight polls vs. priors, I continue to feel good about my side of the bet.
I wouldn’t have made this bet after the debate. I’m not sure to what extent I should have known that Biden would perform terribly. I was blindsided by how poorly he did, but maybe shouldn’t have been.
I definitely wouldn’t have made this bet after the assassination attempt, which I think increased Trump’s chances. But that event didn’t update me on how good my side of the bet was when I made it.
I think there’s like a 75-80% chance that Kamala Harris wins Virginia.
I’m now happy to make this bet about Trump vs. Harris, if you’re interested.
I’d now make this bet if you were down. Offer expires in 48 hours.
Probably no longer willing to make the bet, sorry. While my inside view is that Harris is more likely to win than Nate Silver’s 72%, I defer to his model enough that my “all things considered” view now puts her win probability around 75%.
I’d like to wait and see what various models say.
I have previously bet large sums on elections. Im not currently placing any bets on who will win the election. Seems too unclear to me (note I had a huge bet on biden in 2020, seemed clear then). However there are TONS of mispricings on polymarket and other sites. Things like ‘biden will withdraw or lose the nomination @ 23%’ is a good example.
Given that Biden has dropped out, do you believe that the market was accurately priced at the time?
Polymarket has gotten lots of attention in recent months, but I was shocked to find out how much inefficency there really is.
There was a market titled “What will Trump say during his RNC speech?” that was up a few days ago. At 7 pm, the transcript for the speech was leaked, and you could easily find it by a google search or looking at the polymarket discord.
Trump started his speech at 9:30, and it was immediately that he was using the script. One entire hour into the speech I stumbled onto the transcript on Polymarkets discord. Despite the word “prisons” being in the leaked transcript that Trump was halfway through, Polymarket only gave it a 70% chance of being said. I quickly went to bet and made free money.
To be fair it was a smaller market with 800k in bets, but nonetheless I was shocked on how easy it was to make risk-free money.
Biden not being the democratic nominee at 13% while EITHER Biden or Trump not being their respective nominees at 14% implies a 1% chance that Trump won’t be the Republican nominee. There’s clearly an arbitrage there. Whether it merits the costs (gas, risk of polymarket default, lost opportunity of the escrowed wager) I have no clue.
Betting against republicans and third parties on poly is a sound strategy, pretty clear they are marketing heavily towards republicans and the site has a crypto/republican bias. For anything controversial/political, if there is enough liq on manifold I generally trust it more (which sounds insane because fake money and all).
That being said, I don’t like the way Polymarket is run (posting the word r*tard over and over on Twitter, allowing racism in comments + discord, rugging one side on disputed outcomes, fake decentralization), so I would strongly consider not putting your money on PM and instead supporting other prediction markets, despite the possible high EV.
Feel free to write a post if you find something worthwhile. I didn’t know how likely the whole Biden leaving the race thing was so 5% seemed prudent. At those odds, even if I belief the fivethirtyeight numbers I’d rather leave my money in etfs. I’d probably need something like >>1,2 multiplier in expected value before I’d bother. Last year when I was betting on Augur I was also heavily bitten by gas fees (150$ transaction costs to get my money back because gas fees exploded for eth), so would be good to know if this is a problem on polymarket also.
These predictions, of course, are obviously nonsensical. If I had to guess, it’s a combination of: many crypto users being right-wing and the media they consume has convinced them that this is more likely than it would be in reality, and climbing crypto prices discouraging betting leading to decreased accuracy. I’ll say that the climbing value of the currency as well as gas fees makes any prediction unwise, unless you believe you have massive advantage over the market. I’d personally pass on it, but other people are free to proceed with their money.