Polymarket beat legacy institutions at processing information, in real time and in general. It was just much faster at calling states, and more confident earlier on the correct outcome.
The OG prediction markets community, the community which has been betting on politics and increasing their bankroll since PredictIt, was on the wrong side of 50%—1, 2, 3, 4, 5. It was the democratic, open-to-all nature of it, the Frenchmanwho was convinced that mainstream polls were pretty tortured and bet ~$45M, what moved Polymarket to the right side of 50⁄50.
Polls seem like a garbage in garbage out kind of situation these days. How do you get a representative sample? The answer is maybe that you don’t.
Polymarket will live. They were useful to the Trump campaign, which has a much warmer perspective on crypto. The federal government isn’t going to prosecute them, nor bettors. Regulatory agencies, like the CFTC and the SEC, which have taken such a prominent role in recent editions of this newsletter, don’t really matter now, as they will be aligned with financial innovation rather than opposed to it.
NYT/Siena really fucked up with their last poll and the coverage of it. So did Ann Selzer. Some prediction market bettors might have thought that you could do the bounded distrust, but in hindsight it turns out that you can’t. Looking back, to the extent you trust these institutions, they can ratchet their deceptiveness (from misleading headlines, incomplete stories, incomplete quotes out of context, not reporting on important stories, etc.) for clicks and hopium, to shape the information landscape for a managerial class that… will no longer be in power in America.
Elon Musk and Peter Thiel look like geniuses. In contrast Dustin Moskovitz couldn’t get SB 1047 passed despite being the second largest contributor to Democrats, and has been in-hindsight suboptimally positioning his philanthropic bets by reportedly not funding any slightly right of center work. These are also bets that matter!
I don’t have time to write a detailed response now (might later), but wanted to flag that I either disagree or “agree denotatively but object connotatively” with most of these. I disagree most strongly with #3: the polls were quite good this year. National and swing state polling averages were only wrong by 1% in terms of Trump’s vote share, or in other words 2% in terms of margin of victory. This means that polls provided a really large amount of information.
(I do think that Selzer’s polls in particular are overrated, and I will try to articulate that case more carefully if I get around to a longer response.)
My sense is that the polls were heavily reweighted by demographics, rather than directly sampling from the population. That said, I welcome your nitpicks, even if brief
Think I disagree especially strongly with #6. Of all the reasons to think Musk might be a genius, him going all in on 60⁄40 odds is definitely not one of them Especially since he could probably have got an invite to Mar-a-Lago and President Trump’s ear on business and space policy with a small donation and generic “love Donald’s plans to make American business great again” endorsement, and been able to walk it right back again whenever the political wind was blowing the other way. I don’t think he’s spent his time and much of his fortune to signal boost catturd tweets out of calm calculation of which way the political wind was blowing.
Biggest and highest profile donor to the winning side last time round didn’t do too well out of it either, and he probably did think he was being clever and calculating
(Lifelong right winger Thiel’s “I think it’s 50⁄50 who will win but my contrarian view is I also don’t think it’ll be close” was great hedging his bets, on the other hand!) .
I think this is the wrong way to think about it. From my or your perspective, this might have been 60⁄40 (or even 40⁄60). But a more informed actor can have better probabilities.
My point isn’t that the odds were definitely 60⁄40 (or in any particular range other than “not a dead cert for Trump and his allies to stay in power for as long as anything matters).
My point was that to gloss Musk’s political activity over the last four years as “genius” in a prediction market sense (something even he isn’t claiming) you’ve got to conclude that the most cost effective way a billionaire entrepreneur and major government contractor could get valuable ROI out of an easily-flattered president with overlapping interests was by buying Twitter and embedding himself in largely irrelevant but vaguely aligned culture war bullshit. This seems… unlikely, and it seems even more unlikely people wouldn’t have been upset enough with the economy to vote Trump without Elon’s input.
Otherwise it looks like Elon went on a political opinion binge, and this four year cycle it came up with his cards and not the other lot’s cards. Many other people backed Trump in ways which cost them less and will be easier to reconcile with future administrations, and many others will successfully curry favour without even having backed him.
Put another way, did you consider the donations of SBF to be genius last time round?
I think there is something powerful about noticing who is winning and trying to figure out what the generators for their actions are.
On this specifically:
the most cost effective way a billionaire entrepreneur and major government contractor could get valuable ROI out of an easily-flattered president with overlapping interests was by buying Twitter
This is not how I see it. Buying Twitter and changing its norms was a surprisingly high-leverage intervention in a domain where turning money into power is notoriously difficult. One of the effects, but not the only one, was influencing the outcome of the 2024 US elections.
I think there’s something quite powerful about not going all in on a single data point and noting that Musk backed Hillary Clinton in 2016 and when he did endorse the winning side in 2020 he spent most of the next year publicly complaining about the [predictable] COVID policy outcomes. The base rate for Musk specifically and politically-driven billionaires in general picking winners in elections isn’t better than pollsters, or even notably better than random chance.
Do you honestly believe that Harris (or Biden) would have won if Musk didn’t buy Twitter or spend so much time on it?
Polymarket beat legacy institutions at processing information, in real time and in general. It was just much faster at calling states, and more confident earlier on the correct outcome.
How much of that do you think was about what the legacy institutions knew vs. what they publicly communicated? The Polymarket hive mind doesn’t necessarily care about things like maintaining democratic institutions (like not making calls that could influence elections elsewhere with still-open polls) or long-term individual reputation (like having to walk the Florida call back in 2000). I don’t see those as weaknesses.
If you have {publicly competent, publicly incompetent, privately incompetent, privately competent}, we get some information that screens off publicly competent. That leaves the narrower set {publicly incompetent, privately incompetent, privately competent}. So it’s still an update. I agree that in this case there is some room for doubt though. Depending on which institutions we are thinking of (Democratic party, newspapers, etc.), we also get some information from the speed at which people decided on/learned that Biden was going to step down.
I also frankly don’t think they’re necessarily as interested at making speedy decisions based on county level polls, which is exactly the sort of real time stats checking you’d expect prediction market enthsiasts to be great at
(obviously trad media does report on county level polls and ultimately use them to decide if they’re happy to call a race, but they don’t have much incentive to be first and they’re tracking and checking a lot of other stuff like politico commentary and rumours and relevance of human interest stories and silly voxpops)
Throw in the fact that early counts are sometimes skewed in favour of another candidate which changes around as later voters or postal votes or ballot boxes from further out districts within a county get tallied up. This varies according to jurisdiction rules and demographics and voting trends, and it’s possible serious Poly Market betters were extremely clued up on them. But this time around, they’d have been just as right about state level outcomes if much of the money moved on the relatively naive assumption that you couldn’t expect any late swings, and not factoring in that possibility would be bad calibration.
Current takeaways from the 2024 US election <> forecasting community.
First section in Forecasting newsletter: US elections, posting here because it has some overlap with EA.
Polymarket beat legacy institutions at processing information, in real time and in general. It was just much faster at calling states, and more confident earlier on the correct outcome.
The OG prediction markets community, the community which has been betting on politics and increasing their bankroll since PredictIt, was on the wrong side of 50%—1, 2, 3, 4, 5. It was the democratic, open-to-all nature of it, the Frenchman who was convinced that mainstream polls were pretty tortured and bet ~$45M, what moved Polymarket to the right side of 50⁄50.
Polls seem like a garbage in garbage out kind of situation these days. How do you get a representative sample? The answer is maybe that you don’t.
Polymarket will live. They were useful to the Trump campaign, which has a much warmer perspective on crypto. The federal government isn’t going to prosecute them, nor bettors. Regulatory agencies, like the CFTC and the SEC, which have taken such a prominent role in recent editions of this newsletter, don’t really matter now, as they will be aligned with financial innovation rather than opposed to it.
NYT/Siena really fucked up with their last poll and the coverage of it. So did Ann Selzer. Some prediction market bettors might have thought that you could do the bounded distrust, but in hindsight it turns out that you can’t. Looking back, to the extent you trust these institutions, they can ratchet their deceptiveness (from misleading headlines, incomplete stories, incomplete quotes out of context, not reporting on important stories, etc.) for clicks and hopium, to shape the information landscape for a managerial class that… will no longer be in power in America.
Elon Musk and Peter Thiel look like geniuses. In contrast Dustin Moskovitz couldn’t get SB 1047 passed despite being the second largest contributor to Democrats, and has been in-hindsight suboptimally positioning his philanthropic bets by reportedly not funding any slightly right of center work. These are also bets that matter!
I don’t have time to write a detailed response now (might later), but wanted to flag that I either disagree or “agree denotatively but object connotatively” with most of these. I disagree most strongly with #3: the polls were quite good this year. National and swing state polling averages were only wrong by 1% in terms of Trump’s vote share, or in other words 2% in terms of margin of victory. This means that polls provided a really large amount of information.
(I do think that Selzer’s polls in particular are overrated, and I will try to articulate that case more carefully if I get around to a longer response.)
Oh cool, Scott Alexander just said almost exactly what I wanted to say about your #2 in his latest blog post: https://www.astralcodexten.com/p/congrats-to-polymarket-but-i-still
My sense is that the polls were heavily reweighted by demographics, rather than directly sampling from the population. That said, I welcome your nitpicks, even if brief
Think I disagree especially strongly with #6. Of all the reasons to think Musk might be a genius, him going all in on 60⁄40 odds is definitely not one of them Especially since he could probably have got an invite to Mar-a-Lago and President Trump’s ear on business and space policy with a small donation and generic “love Donald’s plans to make American business great again” endorsement, and been able to walk it right back again whenever the political wind was blowing the other way. I don’t think he’s spent his time and much of his fortune to signal boost catturd tweets out of calm calculation of which way the political wind was blowing.
Biggest and highest profile donor to the winning side last time round didn’t do too well out of it either, and he probably did think he was being clever and calculating
(Lifelong right winger Thiel’s “I think it’s 50⁄50 who will win but my contrarian view is I also don’t think it’ll be close” was great hedging his bets, on the other hand!) .
I think this is the wrong way to think about it. From my or your perspective, this might have been 60⁄40 (or even 40⁄60). But a more informed actor can have better probabilities.
My point isn’t that the odds were definitely 60⁄40 (or in any particular range other than “not a dead cert for Trump and his allies to stay in power for as long as anything matters).
My point was that to gloss Musk’s political activity over the last four years as “genius” in a prediction market sense (something even he isn’t claiming) you’ve got to conclude that the most cost effective way a billionaire entrepreneur and major government contractor could get valuable ROI out of an easily-flattered president with overlapping interests was by buying Twitter and embedding himself in largely irrelevant but vaguely aligned culture war bullshit. This seems… unlikely, and it seems even more unlikely people wouldn’t have been upset enough with the economy to vote Trump without Elon’s input.
Otherwise it looks like Elon went on a political opinion binge, and this four year cycle it came up with his cards and not the other lot’s cards. Many other people backed Trump in ways which cost them less and will be easier to reconcile with future administrations, and many others will successfully curry favour without even having backed him.
Put another way, did you consider the donations of SBF to be genius last time round?
I think there is something powerful about noticing who is winning and trying to figure out what the generators for their actions are.
On this specifically:
This is not how I see it. Buying Twitter and changing its norms was a surprisingly high-leverage intervention in a domain where turning money into power is notoriously difficult. One of the effects, but not the only one, was influencing the outcome of the 2024 US elections.
I think there’s something quite powerful about not going all in on a single data point and noting that Musk backed Hillary Clinton in 2016 and when he did endorse the winning side in 2020 he spent most of the next year publicly complaining about the [predictable] COVID policy outcomes. The base rate for Musk specifically and politically-driven billionaires in general picking winners in elections isn’t better than pollsters, or even notably better than random chance.
Do you honestly believe that Harris (or Biden) would have won if Musk didn’t buy Twitter or spend so much time on it?
How much of that do you think was about what the legacy institutions knew vs. what they publicly communicated? The Polymarket hive mind doesn’t necessarily care about things like maintaining democratic institutions (like not making calls that could influence elections elsewhere with still-open polls) or long-term individual reputation (like having to walk the Florida call back in 2000). I don’t see those as weaknesses.
If you have {publicly competent, publicly incompetent, privately incompetent, privately competent}, we get some information that screens off publicly competent. That leaves the narrower set {publicly incompetent, privately incompetent, privately competent}. So it’s still an update. I agree that in this case there is some room for doubt though. Depending on which institutions we are thinking of (Democratic party, newspapers, etc.), we also get some information from the speed at which people decided on/learned that Biden was going to step down.
I also frankly don’t think they’re necessarily as interested at making speedy decisions based on county level polls, which is exactly the sort of real time stats checking you’d expect prediction market enthsiasts to be great at
(obviously trad media does report on county level polls and ultimately use them to decide if they’re happy to call a race, but they don’t have much incentive to be first and they’re tracking and checking a lot of other stuff like politico commentary and rumours and relevance of human interest stories and silly voxpops)
Throw in the fact that early counts are sometimes skewed in favour of another candidate which changes around as later voters or postal votes or ballot boxes from further out districts within a county get tallied up. This varies according to jurisdiction rules and demographics and voting trends, and it’s possible serious Poly Market betters were extremely clued up on them. But this time around, they’d have been just as right about state level outcomes if much of the money moved on the relatively naive assumption that you couldn’t expect any late swings, and not factoring in that possibility would be bad calibration.