Prediction market prices are more useful than polls, but not quite probabilities either
There has been a lot of talk in recent weeks about prediction markets–either prediction markets inflating the suggested odds of extremely improbable candidates–or whales purportedly manipulating certain markets, such as contracts tied to Trump winning. Or the apparent disconnect between prediction market prices vs. polls, in which Trump’s odds appear conspicuously high relative to how well he is polling. All of these can be explained non-nefarious factors that does not involve collusion/manipulation of markets.
Vice President Kamala Harris and former President Donald Trump are neck and neck in the polls. But in one popular betting market, the odds have skewed heavily in Trump’s favor, raising questions about a recent flurry of wagers and who is behind them.
Over the past two weeks, the chances of a Trump victory in the November election have surged on Polymarket, a crypto-based prediction market. Its bettors were giving Trump a 62% chance of winning on Thursday, while Harris’s chances were 38%. The candidates were in a dead heat at the start of October.
