> Metaculus lists the chance of Elon Musk becoming CEO of Twitter by 2025 as 10%. I don’t know how to square this with Polymarket, unless they think that Twitter might get delisted for other, non-Musk-related reasons.
I mean, if Musk is forced to buy Twitter, he doesn't have to make himself CEO?
Would love to see a number of predictions about the medium-term (say, 5 years) consequences of Dobbs in terms of number of abortions, availability of abortion pills, births, moves between states, and the like. So far have not seen any such “bundle of predictions” from Scott or the usual suspects, so I launched a mini forecasting contest to get answers.
Roe was reversed, not "repealed". Only laws can be repealed. Dobbs neither enacted nor invalidated any law. If anything it did the opposite: it walked back the limits that Roe had placed on legislation.
Normally I wouldn't be so pedantic about this, but the idea that SCOTUS made policy in Dobbs is so mistaken and so central to wrong narratives of the decision that I can't ignore it.
I presume she would say it won't survive "in a spiritual sense". In effect I think she means: "if the Republican party does this, it will have permanently became something I really don't like".
can this be the moment a sane third party is born that doesn't turn gynecological health into a national circus and only talks about actual problems and effective solutions
The fact that different markets predict different incompatible things is a big strike against the hope of accurate prediction through prediction markets.
Also, I always find it funny when rationalists say things like "and rush to the prediction markets without thinking very hard about how Bayesian updating works."
You know most people don't think about Bayesian updating at all right ?
One possible reason that the Dobbs case had a stronger impact on decision vs. the draft release may be that the draft was from Alito, but the decision itself included the Thomas concurrance, where he pretty much said that contracraction, gay marriage and sodomy laws will be next.
One possibility on Dobbs is that a number of investors assumed that the polls, which were moved very little (if at all) by the leak, would not move as a result of Dobbs - ie they assumed that voters had already updated for Dobbs and the actual opinion wouldn't affect voting intention.
This was quickly shown to be wrong; there has been noticeable movement in the polls after Dobbs.
If one thousand people toss a coin five times, roughly thirty of them will get five heads in a row. How do you, or Samotsvety, distinguish between predictors who were right through sheer chance, and those who were right thanks to their ability to accurately predict the future?
On the prediction markets and Dobbs, why isn't the answer that prediction markets aren't that great? I think there have been other posts on this that I haven't read, but sometimes it feels like if there was a PredictIt thing "the Sun will rise tomorrow" and it was only at 98%, people on here would all be freaking out about the small-but-real-possibility of the world suddenly ending.
Separately on trump, I think it makes sense to distinguish between "trump's political career is over" and "trump is indicted or becomes universally unpopular or some other type of major repudiation". The latter is what he seems to wriggle out of. For the former, my prediction is he'll probably lose the 2024 nomination (if he runs).
> Liz Cheney says the Republican Party “can’t survive” nominating Trump in 2024. This is exactly the kind of prediction I anticipate people walking back if they were asked to make it formally. Let’s say “conditional on Trump as 2024 nominee, Republicans won’t get >40% of the vote in either of the 2028 or 2032 presidential elections”. Would Liz Cheney - or anyone else - really take that bet, at any odds?
Yes, there are people who would happily take that bet at unfavorable odds.
This ties into the "motivation for formal forecasting" that you mention earlier. The point of forecasting is often not to passively make accurate guesses about where the future will go. It's to influence the future to go where you want it to go, by providing confident leadership in that direction.
When that's your model, it's not really relevant whether you end up winning or losing money on the bet. The point was to make the bet.
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On a mostly-unrelated note, "will Twitter be delisted by July 31[, 2022]?" is obviously mispriced at $0.01 yes, $0.99 no - yes should be lower and no should be higher. Is that a possibility on polymarket?
Regarding the Dobbs thing, maybe some people thought if the leak and pressure campaign had made SCOTUS change its final decision, it would have been a scandal on itself that favored Republicans. Or maybe they thought the final decision would drag out longer and that it happened relatively fast, or at that particular moment, favored Democrats in some way. Or they expected more immediate riots or some other immediate reaction that didn't happen and viceversa. But I guess it's just the markets being wrong.
Re: Twitter, you can look to the stock price itself, and think of it like:
- X% odds Musk wins, or only has to pay a $1B, resulting in Twitter being a ~$20 stock (some uncertainty around the $20 figure, but this is roughly the midpoint of downsides people are using).
- (1-X) % odds Twitter wins and forces Musk to buy the company at somewhere between $46-54.20, with probably a midpoint at around $50.
The current stock price is $32.65, so if you solve for X, you get something like a 57% chance of a Musk victory from the market.
This is sensitive to some assumptions around:
1) The downside (is Twitter a $20 stock, or a $35 stock without Musk).
2) What's the distribution of outcomes around an outright Twitter victory vs. a recut deal at like $46.
3) The possibility of a large cash settlement by Musk to get out of the deal, worth like $10-15B or something (in which case Musk wouldn't own Twitter, but Twitter would trade at well north of the downside price).
So still no perfect answer here, but another datapoint to track.
On the Polymarket question, the current view in the arb space is that a trial is likely to be decided by the end of the year FWIW. Delaware Court of Chancery moves quickly when necessary, and they need to leave time for appeals.
On Roe, it’s important to consider that the 95% chance was for allowing Mississippi’s abortion ban — not for striking Roe.
The decision could have easily been like Roberts’ concurrence, allowing 15-week abortion bans but upholding Roe. Or many other compromise options available to the court. But instead they went all the way.
As a side note, my site ElectionBettingOdds.com aggregates odds like Senate chances, volume-weighting together different markets like PredictIt and Polymarket (hover over the candidate images to see the exact market breakdowns.)
There may be no 'Dobbs mystery'. The metaculus question resolved to yes if any law banning abortions before the viability line was upheld. It was obvious based on oral arguments there was at least a 6-3 majority to get rid of that standard, and as we saw in the Chief's concurrence he wanted to come up with a different one under which to uphold the Mississippi law. There were a lot of less Democratic energizing outcomes between 'upholding Missisipi's 15 week ban' and returning the question to the states completely.
Perhaps 538's model had an effect pre-June 30 because of the model's results being leaked to some people, although I don't know anything about 538's predictions leaking. There could've also been some "insider trading" on 538's side. I don't know much about that either, but the amount of volume is small enough that, I think, a few players could move the market a couple percentage points (at 30c per share, a single user can buy up to 2833 shares). This could explain why there was less Metaculus movement.
Like Scott wrote, this speculation is partly motivated by the initial Roe vs. Wade leak (May 2) only slightly moving the PredictIt market, even though everybody seemingly interpreted the leak as being definitive. Also, if people are already taking the leak as fact, why is there a second jump upon the official release? Maybe more people entered the market after the release?
The Matt Levine article was hard to get through. I liked how he said Musk has "a hobby of pretending to take companies private" and then pointed to .. one other example (the only example). The 420 fiasco. And it's a very inaccurate characterization of that deal, if you look into the details.
Matt seems to think that there is little difference between "pretending to do something" and "doing something without 100% commitment in the face of unforeseen circumstances". He is wrong, and the article suffers for the inaccuracy.
> Metaculus lists the chance of Elon Musk becoming CEO of Twitter by 2025 as 10%.
There is effectively a 0% chance of Musk ever becoming Twitter's CEO. Twitter is a time suck with likely very little impact on human existence. Not so for Tesla and SpaceX. I could only see Musk becoming CEO if every one of his other companies crashed and burned. Becoming Twitter's owner doesn't mean he'd be CEO.
> But taken seriously, this implies that a memo by the Supreme Court Justices saying “we are reversing Roe” only implied a 33% chance they would really do it. But we saw earlier that the prediction markets were saying there was a 95% chance they would! So why the big update when it happened?
Because courts are swayed by outside influence. For instance, FDR threatened the court and they quickly got back in line.
> 23% by December 30, but probably a trial would drag on long past then, so I don’t think that’s the final chance.
The Chancery court operates pretty quickly with cases resolved in months - from how Levine talks about the issues I don't see any difficult legal questions that would require significantly more time than average.
Is there not new information in the reaction to Dobbs? I haven't looked at the polling in-depth but public reaction to "The Supreme Court is going to reverse Roe" in Spring and "The Supreme Court has reversed Roe" in June seem qualitatively different to me
On the Dobbs shift, I agree that the markets are probably just dumb but I can tell a story where the large update makes sense because everyone was expecting Democrats to be moderately angry about the ruling and instead they were very angry, so the markets moved with this new information.
"But taken seriously, this implies that a memo by the Supreme Court Justices saying “we are reversing Roe” only implied a 33% chance they would really do it."
This should really be 25% instead of 33%. The total drop in the chance of Republicans taking the senate was 20%, and only 5% (a quarter of that) happened when the draft opinion was announced.
Worth pointing out that the Dobbs ruling wasn't the only thing that happened that week in SC news. There was a spate of conservative rulings on various issues (gun, religion, etc) all around that time, as well as Thomas specifically calling out gay marriage, sodomy, and contraception as next on the chopping block.
Plausibly people could have looked at the leak and said 'we knew the right to privacy stuff was shaky, the court might do this even if it was fairly reserved and neutral and non-activist'. Then updated on that when they saw all those rulings plus the Thomas opinion at once.
"Democrats are angry about the overturning of Roe. Republicans are happy, but angry people vote and happy people mostly don’t. "
Agreed. Purely from a GOP tactical point of view, I'm surprised that the right wing majority in SCOTUS didn't find some way to delay the decision until after the midterm elections.
Re long term human survival can we finally build some undersea habitats with nuclear power and algae farming that could survive even the worst case nuclear war (assuming it's not directly targeted).
I'm specifically grateful for the examples of contradictions and otherwise not so clever behaviour on prediction markets. They help build a realistic expectation - much more useful to me than thinking of prediction markets as *heavenly new tools that solve everything* (which would be shattered anyway soon).
"Republicans are happy, but angry people vote and happy people mostly don’t."
My first reading of this sentence was that Republicans are angry that people vote and happy that people mostly don't. Granted, (not that I know that much about US politics) that does sound like something some people might actually say.
My theory on the effect of Dobbs is this: the leak might have happened weeks ago, but the "Well actually this will help Dems in the midterms" think-pieces didn't start coming out until the official release.
Prediction market participants are just as susceptible to being sucked in by a narrative as anyone else.
RE: Senate odds, maybe it's more sophisticated than just Dobbs. The Republicans meaningfully injured their chances by nominating a few really bad candidates for swing-state Senate seats (Oz, Walker) in primaries that occurred prior to that spike. You have to win actual elections every now and then, with actual candidates.
> But taken seriously, this implies that a memo by the Supreme Court Justices saying “we are reversing Roe” only implied a 33% chance they would really do it. But we saw earlier that the prediction markets were saying there was a 95% chance they would! So why the big update when it happened?
Because the news was likely disseminated to more people when the decision happened due to protests etc. I think it's simply just more people. not that the same individuals updated.
Also, it's possible that some people did indeed think 33%. There isn't perfect knowledge.
Traditional markets have a phenomenon called post earnings drift. It takes them time to digest earnings surprises, between weeks to months depending on the sophistication of the participants. This effect is contrary to the efficient market hypothesis.
This is in the largest most liquid markets in the world. I would expect smaller prediction markets to have some inefficiencies like this too. After all stock markets are predicting the long term earnings of stocks, just like prediction markets are predicting the payout.
The research is nicely reviewer in "Positional Options Trading 2020" which I am reading now.
Earth to January 6 committee: if you're looking to influence what Republicans think of Trump, try to come out as honest and maybe even somewhat sympathetic, try to look as if you're doing your best trying to do the right thing, as opposed to wanting to see how many people's lives you can destroy because you don't like their politics. I wonder if nobody ever told them how they would look, or if they just did not care. I'd guess the second.
> This is a weird pattern, isn’t it? If the Roe reversal really improved Democrats’ chances by 15%, why did it take until the reversal happened for people to update? Why not update as soon as the draft came out? Sure, things could have changed between the draft and the decision. But taken seriously, this implies that a memo by the Supreme Court Justices saying “we are reversing Roe” only implied a 33% chance they would really do it. But we saw earlier that the prediction markets were saying there was a 95% chance they would! So why the big update when it happened?
The one big update that did happen is on the level of public response to the decision. It definitely surprised me somewhat; I was expecting the public response to the ruling to be smaller because the public response to the leak was small. The level of public response is information that was only really available after the ruling actually came out, and that's information that's really key in determining how big an impact the ruling will have on elections. So taking that into account, I think the pattern is fully compatible with bettors updating rationally.
> Metaculus lists the chance of Elon Musk becoming CEO of Twitter by 2025 as 10%. I don’t know how to square this with Polymarket, unless they think that Twitter might get delisted for other, non-Musk-related reasons.
I mean, if Musk is forced to buy Twitter, he doesn't have to make himself CEO?
Would love to see a number of predictions about the medium-term (say, 5 years) consequences of Dobbs in terms of number of abortions, availability of abortion pills, births, moves between states, and the like. So far have not seen any such “bundle of predictions” from Scott or the usual suspects, so I launched a mini forecasting contest to get answers.
Roe was reversed, not "repealed". Only laws can be repealed. Dobbs neither enacted nor invalidated any law. If anything it did the opposite: it walked back the limits that Roe had placed on legislation.
Normally I wouldn't be so pedantic about this, but the idea that SCOTUS made policy in Dobbs is so mistaken and so central to wrong narratives of the decision that I can't ignore it.
I presume she would say it won't survive "in a spiritual sense". In effect I think she means: "if the Republican party does this, it will have permanently became something I really don't like".
can this be the moment a sane third party is born that doesn't turn gynecological health into a national circus and only talks about actual problems and effective solutions
nope probably not but what a nice fantasy
The fact that different markets predict different incompatible things is a big strike against the hope of accurate prediction through prediction markets.
Also, I always find it funny when rationalists say things like "and rush to the prediction markets without thinking very hard about how Bayesian updating works."
You know most people don't think about Bayesian updating at all right ?
One possible reason that the Dobbs case had a stronger impact on decision vs. the draft release may be that the draft was from Alito, but the decision itself included the Thomas concurrance, where he pretty much said that contracraction, gay marriage and sodomy laws will be next.
https://en.m.wikipedia.org/wiki/Dobbs_v._Jackson_Women%27s_Health_Organization#Concurrences
One possibility on Dobbs is that a number of investors assumed that the polls, which were moved very little (if at all) by the leak, would not move as a result of Dobbs - ie they assumed that voters had already updated for Dobbs and the actual opinion wouldn't affect voting intention.
This was quickly shown to be wrong; there has been noticeable movement in the polls after Dobbs.
If one thousand people toss a coin five times, roughly thirty of them will get five heads in a row. How do you, or Samotsvety, distinguish between predictors who were right through sheer chance, and those who were right thanks to their ability to accurately predict the future?
On the prediction markets and Dobbs, why isn't the answer that prediction markets aren't that great? I think there have been other posts on this that I haven't read, but sometimes it feels like if there was a PredictIt thing "the Sun will rise tomorrow" and it was only at 98%, people on here would all be freaking out about the small-but-real-possibility of the world suddenly ending.
Separately on trump, I think it makes sense to distinguish between "trump's political career is over" and "trump is indicted or becomes universally unpopular or some other type of major repudiation". The latter is what he seems to wriggle out of. For the former, my prediction is he'll probably lose the 2024 nomination (if he runs).
> Liz Cheney says the Republican Party “can’t survive” nominating Trump in 2024. This is exactly the kind of prediction I anticipate people walking back if they were asked to make it formally. Let’s say “conditional on Trump as 2024 nominee, Republicans won’t get >40% of the vote in either of the 2028 or 2032 presidential elections”. Would Liz Cheney - or anyone else - really take that bet, at any odds?
Yes, there are people who would happily take that bet at unfavorable odds.
This ties into the "motivation for formal forecasting" that you mention earlier. The point of forecasting is often not to passively make accurate guesses about where the future will go. It's to influence the future to go where you want it to go, by providing confident leadership in that direction.
When that's your model, it's not really relevant whether you end up winning or losing money on the bet. The point was to make the bet.
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On a mostly-unrelated note, "will Twitter be delisted by July 31[, 2022]?" is obviously mispriced at $0.01 yes, $0.99 no - yes should be lower and no should be higher. Is that a possibility on polymarket?
Musk - Twitter lawsuit is about making him pay the deal price - market price.
this might not even involve him getting control of Twitter. might be - most likely - a negotiated solution. and can drag on for years
Regarding the Dobbs thing, maybe some people thought if the leak and pressure campaign had made SCOTUS change its final decision, it would have been a scandal on itself that favored Republicans. Or maybe they thought the final decision would drag out longer and that it happened relatively fast, or at that particular moment, favored Democrats in some way. Or they expected more immediate riots or some other immediate reaction that didn't happen and viceversa. But I guess it's just the markets being wrong.
Dobbs decision alone is one thing.
the sequence of public and political reactions to it is as important.
updating based on actual pubic political dynamic is sensible
Re: Twitter, you can look to the stock price itself, and think of it like:
- X% odds Musk wins, or only has to pay a $1B, resulting in Twitter being a ~$20 stock (some uncertainty around the $20 figure, but this is roughly the midpoint of downsides people are using).
- (1-X) % odds Twitter wins and forces Musk to buy the company at somewhere between $46-54.20, with probably a midpoint at around $50.
The current stock price is $32.65, so if you solve for X, you get something like a 57% chance of a Musk victory from the market.
This is sensitive to some assumptions around:
1) The downside (is Twitter a $20 stock, or a $35 stock without Musk).
2) What's the distribution of outcomes around an outright Twitter victory vs. a recut deal at like $46.
3) The possibility of a large cash settlement by Musk to get out of the deal, worth like $10-15B or something (in which case Musk wouldn't own Twitter, but Twitter would trade at well north of the downside price).
So still no perfect answer here, but another datapoint to track.
On the Polymarket question, the current view in the arb space is that a trial is likely to be decided by the end of the year FWIW. Delaware Court of Chancery moves quickly when necessary, and they need to leave time for appeals.
On Roe, it’s important to consider that the 95% chance was for allowing Mississippi’s abortion ban — not for striking Roe.
The decision could have easily been like Roberts’ concurrence, allowing 15-week abortion bans but upholding Roe. Or many other compromise options available to the court. But instead they went all the way.
As a side note, my site ElectionBettingOdds.com aggregates odds like Senate chances, volume-weighting together different markets like PredictIt and Polymarket (hover over the candidate images to see the exact market breakdowns.)
There may be no 'Dobbs mystery'. The metaculus question resolved to yes if any law banning abortions before the viability line was upheld. It was obvious based on oral arguments there was at least a 6-3 majority to get rid of that standard, and as we saw in the Chief's concurrence he wanted to come up with a different one under which to uphold the Mississippi law. There were a lot of less Democratic energizing outcomes between 'upholding Missisipi's 15 week ban' and returning the question to the states completely.
Perhaps 538's model had an effect pre-June 30 because of the model's results being leaked to some people, although I don't know anything about 538's predictions leaking. There could've also been some "insider trading" on 538's side. I don't know much about that either, but the amount of volume is small enough that, I think, a few players could move the market a couple percentage points (at 30c per share, a single user can buy up to 2833 shares). This could explain why there was less Metaculus movement.
Like Scott wrote, this speculation is partly motivated by the initial Roe vs. Wade leak (May 2) only slightly moving the PredictIt market, even though everybody seemingly interpreted the leak as being definitive. Also, if people are already taking the leak as fact, why is there a second jump upon the official release? Maybe more people entered the market after the release?
The Matt Levine article was hard to get through. I liked how he said Musk has "a hobby of pretending to take companies private" and then pointed to .. one other example (the only example). The 420 fiasco. And it's a very inaccurate characterization of that deal, if you look into the details.
Matt seems to think that there is little difference between "pretending to do something" and "doing something without 100% commitment in the face of unforeseen circumstances". He is wrong, and the article suffers for the inaccuracy.
> Metaculus lists the chance of Elon Musk becoming CEO of Twitter by 2025 as 10%.
There is effectively a 0% chance of Musk ever becoming Twitter's CEO. Twitter is a time suck with likely very little impact on human existence. Not so for Tesla and SpaceX. I could only see Musk becoming CEO if every one of his other companies crashed and burned. Becoming Twitter's owner doesn't mean he'd be CEO.
> But taken seriously, this implies that a memo by the Supreme Court Justices saying “we are reversing Roe” only implied a 33% chance they would really do it. But we saw earlier that the prediction markets were saying there was a 95% chance they would! So why the big update when it happened?
Because courts are swayed by outside influence. For instance, FDR threatened the court and they quickly got back in line.
> 23% by December 30, but probably a trial would drag on long past then, so I don’t think that’s the final chance.
The Chancery court operates pretty quickly with cases resolved in months - from how Levine talks about the issues I don't see any difficult legal questions that would require significantly more time than average.
https://www.courts.delaware.gov/aoc/annualreports/fy20/doc/2020StatisticalInformationReport.pdf.
Is there not new information in the reaction to Dobbs? I haven't looked at the polling in-depth but public reaction to "The Supreme Court is going to reverse Roe" in Spring and "The Supreme Court has reversed Roe" in June seem qualitatively different to me
On the Dobbs shift, I agree that the markets are probably just dumb but I can tell a story where the large update makes sense because everyone was expecting Democrats to be moderately angry about the ruling and instead they were very angry, so the markets moved with this new information.
"But taken seriously, this implies that a memo by the Supreme Court Justices saying “we are reversing Roe” only implied a 33% chance they would really do it."
This should really be 25% instead of 33%. The total drop in the chance of Republicans taking the senate was 20%, and only 5% (a quarter of that) happened when the draft opinion was announced.
Which prediction market would you recommend for a beginner?
Worth pointing out that the Dobbs ruling wasn't the only thing that happened that week in SC news. There was a spate of conservative rulings on various issues (gun, religion, etc) all around that time, as well as Thomas specifically calling out gay marriage, sodomy, and contraception as next on the chopping block.
Plausibly people could have looked at the leak and said 'we knew the right to privacy stuff was shaky, the court might do this even if it was fairly reserved and neutral and non-activist'. Then updated on that when they saw all those rulings plus the Thomas opinion at once.
"If the Roe reversal really improved Democrats’ chances by 15%, why did it take until the reversal happened for people to update?"
A skeptical public distrusts leaked government documents, especially ones with a culture war payload. They are sometimes bogus.
East African Federation question also on Manifold predates the Metaculus market: https://manifold.markets/EliGaultney/will-the-east-african-federation-le
Currently at 13%.
"Democrats are angry about the overturning of Roe. Republicans are happy, but angry people vote and happy people mostly don’t. "
Agreed. Purely from a GOP tactical point of view, I'm surprised that the right wing majority in SCOTUS didn't find some way to delay the decision until after the midterm elections.
NYT 7/12/2022 Half of G.O.P. Voters Ready to Leave Trump Behind, Poll Finds
https://www.nytimes.com/2022/07/12/us/politics/trump-approval-polling-2024.html?
Are Polls predictive?
How do you forecast Covid when the virus is mutating?
Forecasting Methods depend on assumption parameters which are also time dependent
From: https://tinyurl.com/Prediction-Analysis
Extrapolative Forecasting
Theoretical Forecasting
Intuitive Prediction
Re long term human survival can we finally build some undersea habitats with nuclear power and algae farming that could survive even the worst case nuclear war (assuming it's not directly targeted).
I'm specifically grateful for the examples of contradictions and otherwise not so clever behaviour on prediction markets. They help build a realistic expectation - much more useful to me than thinking of prediction markets as *heavenly new tools that solve everything* (which would be shattered anyway soon).
Nate Silver hinted at what his forecast would show on 06/29: https://twitter.com/natesilver538/status/1542228065123811329?s=21&t=ipIZa8fVMgAtLYOUGD5flQ
"Republicans are happy, but angry people vote and happy people mostly don’t."
My first reading of this sentence was that Republicans are angry that people vote and happy that people mostly don't. Granted, (not that I know that much about US politics) that does sound like something some people might actually say.
My theory on the effect of Dobbs is this: the leak might have happened weeks ago, but the "Well actually this will help Dems in the midterms" think-pieces didn't start coming out until the official release.
Prediction market participants are just as susceptible to being sucked in by a narrative as anyone else.
RE: Senate odds, maybe it's more sophisticated than just Dobbs. The Republicans meaningfully injured their chances by nominating a few really bad candidates for swing-state Senate seats (Oz, Walker) in primaries that occurred prior to that spike. You have to win actual elections every now and then, with actual candidates.
> But taken seriously, this implies that a memo by the Supreme Court Justices saying “we are reversing Roe” only implied a 33% chance they would really do it. But we saw earlier that the prediction markets were saying there was a 95% chance they would! So why the big update when it happened?
Because the news was likely disseminated to more people when the decision happened due to protests etc. I think it's simply just more people. not that the same individuals updated.
Also, it's possible that some people did indeed think 33%. There isn't perfect knowledge.
> Maybe people are just dumb
Traditional markets have a phenomenon called post earnings drift. It takes them time to digest earnings surprises, between weeks to months depending on the sophistication of the participants. This effect is contrary to the efficient market hypothesis.
This is in the largest most liquid markets in the world. I would expect smaller prediction markets to have some inefficiencies like this too. After all stock markets are predicting the long term earnings of stocks, just like prediction markets are predicting the payout.
The research is nicely reviewer in "Positional Options Trading 2020" which I am reading now.
Earth to January 6 committee: if you're looking to influence what Republicans think of Trump, try to come out as honest and maybe even somewhat sympathetic, try to look as if you're doing your best trying to do the right thing, as opposed to wanting to see how many people's lives you can destroy because you don't like their politics. I wonder if nobody ever told them how they would look, or if they just did not care. I'd guess the second.
> This is a weird pattern, isn’t it? If the Roe reversal really improved Democrats’ chances by 15%, why did it take until the reversal happened for people to update? Why not update as soon as the draft came out? Sure, things could have changed between the draft and the decision. But taken seriously, this implies that a memo by the Supreme Court Justices saying “we are reversing Roe” only implied a 33% chance they would really do it. But we saw earlier that the prediction markets were saying there was a 95% chance they would! So why the big update when it happened?
The one big update that did happen is on the level of public response to the decision. It definitely surprised me somewhat; I was expecting the public response to the ruling to be smaller because the public response to the leak was small. The level of public response is information that was only really available after the ruling actually came out, and that's information that's really key in determining how big an impact the ruling will have on elections. So taking that into account, I think the pattern is fully compatible with bettors updating rationally.