The Wisdom (and Madness) of Crowds: Political Markets as Election Predictors!

[@parttimelarry]

Thanks for discussing this topic! I find it fascinating

[@yuvrajrathi6012]

Ayo Larry! You two are among my favourite youtubers

[@thomas6502]

Enjoyed this. Thank you!

[@financialtrader3435]

Thanks Aswath. Love your lectures.

[@viewpanupong5134]

great topic, thank you

[@jaredtg2000]

Thank you.

[@liliiarudenko]

Thank you for advise !

[@sabracnet]

Love it !!! Wisdom of crowds precisely !!! Thank-you for the validation professor !!!

[@DilipDeo2105]

Superb insight professor. 👍

[@superlumic]

Always great to hear from you Professor. Prediction markets seem like a great tool where outcome can’t be influenced by the prediction itself, but I do wonder whether these prediction markets could also become self fulfilling prophecies especially for things like elections? The Pygmalion effect is a psychological phenomenon in which high expectations lead to improved performance in a given area and low expectations lead to worse performance- which makes me wonder if a candidate’s victory as predicted by these markets with high degree actually becomes the very reason these candidates win?

[@clinttube]

That's especially true for elections because of the time dimension which was not explored at all in this talk (which I liked to be clear). If your candidate has a perceived huge lead, the impetus for many people to vote is reduced. Likewise for the opposite scenario; however whichever candidate has the greater true support of voters who will come out regardless has an edge (good thing). If the ease of voting isn't constant between groups though (longer lines in cities/ballot harvesting operations/closer polling locations, etc.), that genuine support can be drowned out. Making it roughly as much effort to vote no matter where you are, and having voting last long enough that temporary bandwagon effects get revealed/cancelled out but not too long that information is missing for earliest voters, is key in my opinion. When it's an equity security, sure there is a time/price/cost dimension like anything else, but you aren't getting evaluated at a particular end point. The discrete time dimension for an election would seem to enhance the effect you're talking about.

[@tak-ada]

your the best!

[@boccobadz]

Thank you. Polymarket is global, Kalshi is US only. The problem is biased media doing polling - you'll never get truthful answers from people your candidate and media call nazis (rant: left side uses lots of word they don't understand). Men lie, women lie, numbers don't - when in doubt, follow the money. The guy who make it big on Polymarket did his own polling via neighbour method and he got it right because people weren't afraid to say what they really thought (famous "asking for a friend"). Rotten Tomatoes and other sites like this also show how biased paid media shillers are vs people's reviews (not to mention sites removing unfavourable reviews, case of the newest Dragon Age game, which is horrible, yet all journalists left the same, positive reviews, Marvel movies after Endgame, etc). I think the biggest difference is that expert gets paid for shilling / pushing narrative (because these days everyone is biased one way or the other) before they give their opinion (so the final outcome doesn't matter to them), and market participants get paid only if they're right.

[@JuanPerez-fq6wx]

Profesor, your content is always well received! Thank you for the many lessons

[@FullLengthInterstates]

Nothing can replace a constituency-wide, official poll with strong safeguards. Its why presidential elections should always be used as an opportunity to get the public's opinions on as many policies as possible, via direct ballot questions

[@DF-ss5ep]

The distinguishing feature of these markets is that they have large positive externalities. I will be interesting to find out (to me, at least, as I don't know the answer) if these platforms will be able to capture some of these externalities, perhaps through paywalls.

[@AleydisRoscoe]

Thanks for the forecast! I have a quick question: I have a SafePal wallet with USDT, and I have the seed phrase. (alarm fetch churn bridge exercise tape speak race clerk couch crater letter). How can I transfer them to Binance?

[@perathambkk]

I recall there were democracies in India before Greek and Roman. Some religious texts.

[@ankushkhazanchi4575]

Odd question I know, but why are there gridlines in the ppt background?!?!

[@nshs1234]

Statistically Kosher got me 🤣🤣

[@manuvns]

The flaw is in the electoral system , what about the Blue counties in red states ?

[@ra3511]

Thanks Prof! Could you provide an update on your views of crypto in light of the latest election result? And different potential ways investors can look at the purported "opportunity"?

[@louisaparker]

Political prediction markets have existed for decades. It's not a new thing.

[@orlando7448]

Someone on Team Trump wanted them to become widely adopted this election

[@akirasuzuki8378]

Will AI help to take out the emotion from investing and minimize the madness of crowd?

[@TakeBackTheMoralOrder]

Professor, please tell me that you own a dog.

[@nwgverified]

It was pretty clear that trump was going to win from the polling but gauging voter turnout is always difficult.

[@rexiioper6920]

The professor definitely isn’t a high brow reader. 😅

[@richhh7772]

How to lie with statistics - darrell huff

[@yeetboi268]

who you voted for?

[@breakingthebox8942]

Your mom

[@yeetboi268]

@@breakingthebox8942 Kamala my mommy? Cool, thanks

[@lizlemon9632]

Too much NOISE out there.