Analyzing Prediction Markets and Their Reliability

I.

Polymarket (and prediction markets in general) had an amazing Election Night. They called states impressively early and accurately, kept the site stable through what must have been incredible strain, and have successfully gotten prediction markets in front of the world (including the Trump campaign). From here it’s a flywheel; victory building on victory. Enough people heard of them this election that they’ll never lack for customers. And maybe Trump’s CFTC will be kinder than Biden’s and relax some of the constraints they’re operating under. They’ve realized the long-time rationalist dream of a widely-used prediction market with high volume, deserve more praise than I can give them here, and I couldn’t be happier with their progress.

But I also think their Trump shares were mispriced by about ten cents, and that Trump’s victory in the election doesn’t do much to vindicate their numbers.

https://www.astralcodexten.com/p/congrats-to-polymarket-but-i-still