Interestingly, those who invested their own money in forecasting the outcome performed a lot better in predicting what would happen than did the pollsters. The betting markets had the Conservatives well ahead in the number of seats they would win right through the campaign and were unmoved in this belief throughout. Polls went up, polls went down, but the betting markets had made their mind up. The Tories, they were convinced, were going to win significantly more seats than Labour.
I just read the Wikipedia article on Prediction Markets, and thought others might find it interesting.
Basically, people can be betting monopoly money or only pennies, and they will make significantly better predictions than if you just ask them to guess. Some will use tools like Applies Information Economics to make surprisingly accurate predictions, at least on average. Others will still just guess, but they’ll have a calibrated probability assessment, or perhaps will just be playing the game for the sake of better calibrating their probability assessments.
At some point, I need to calibrate my probability assessments, and put all this LW theory into practice.
I was looking at paddypower (they take bets on the election) and while they were more accurate than the polls they were still underestimating the number of seats the tories were going to get by ~50 seats. I think the safest bet the day before was the tories in a coalition.
The, ahem, money quote:
A bet is a tax on bullshit :-)
FWIW betting odds were almost exactly 50:50 over who would be prime minister after the election right up until the BBC exit poll was announced.
I just read the Wikipedia article on Prediction Markets, and thought others might find it interesting.
Basically, people can be betting monopoly money or only pennies, and they will make significantly better predictions than if you just ask them to guess. Some will use tools like Applies Information Economics to make surprisingly accurate predictions, at least on average. Others will still just guess, but they’ll have a calibrated probability assessment, or perhaps will just be playing the game for the sake of better calibrating their probability assessments.
At some point, I need to calibrate my probability assessments, and put all this LW theory into practice.
I was looking at paddypower (they take bets on the election) and while they were more accurate than the polls they were still underestimating the number of seats the tories were going to get by ~50 seats. I think the safest bet the day before was the tories in a coalition.
Yes, the bookies performed better, but still not particularly well.
It has been been pointed out that it’s hard to predict, especially the future :-)