The last week hasn’t been great for the Democratic Party. First Biden bombed the debate. But the subsequent decision about whether/how to replace Bi

Prediction Markets Suggest Replacing Biden

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2024-07-02 07:30:04

The last week hasn’t been great for the Democratic Party. First Biden bombed the debate. But the subsequent decision about whether/how to replace Biden has also been embarrassing. Biden has refused to step aside gracefully, and party elites don’t seem to have any contingency plan. Worse, they don’t even seem united on the need to figure anything out, with many deflecting the conversation to irrelevant points like “Trump is also bad” or pretending that nothing is really wrong.

Some of the party’s problems are hard and have no shortcuts. But the big one - figuring out whether replacing Biden would even help the Democrats’ electoral chances - is a good match for prediction markets. Set up markets to find the probability of Democrats winning they nominate Biden, vs. the probability of Democrats winning if they replace him with someone else.

Before we go into specifics, the summary result: Replacing Biden with Harris is neutral to slightly positive; replacing Biden with Newsom or a generic Democrat increases their odds of winning by 10 - 15 percentage points. There are some potential technical objections to this claim, but they mostly suggest reasons why the markets might overestimate Biden’s chances rather than underestimate them.