This election cycle, Polymarket's betting odds have been a major story.
But no one understands what they actually are or how they work! 🤦♂️
Let me help you clear up some misunderstandings.
What Even Are the Polymarket Odds?
First, what are Polymarket odds? 🤔
People betting on the outcome of the election. That's it.
It has nothing to do with real voters. It's people, who may or may not be able to vote themselves, guessing who will win in the end, and putting money behind those guesses.
They themselves don't determine the outcome of the election. However, they directly stand the most to gain from being right, and lose from being wrong.
No one is going to bet based on wishful thinking or biases if they stand to lose money for it... or if they do, someone who doesn't have this weakness can just bet the other way and take their money.
Why are polls so different?
Election polling shows a very different result, with 1.5% lead for Harris at time of writing.
Why is this?
First, it's a very different metric. These are samplings of voters who will actually be deciding the election, so in some ways it's a truer metric, but they aren't actually staking anything. They don't lose money when they pick the losing team.
Second, the sampling may be skewed towards Harris. Respondents are more likely to trust legacy institutions, which would skew them left. Also, Trump in particular has been made such a toxic brand by much of the country that many people who planned on voting for him wouldn't admit it. We saw this effect in 2016.
And third, because of the electoral college, Harris could very well have a 1.5% lead among voters, but still lose the election because she won't win enough states. She could remain ahead, and get more votes, while the chances she loses go very high in the opposite direction. And both metrics would be correct.
Can Polymarket be gamed?
Is it possible people are intentionally betting on Polymarket in certain ways in order to influence the election?
Yes, but probably not.
If people genuinely think Trump may lose, but bet that he'll win, all that'll do is make them lose money. 💸 It makes zero sense to do this for a vanity metric that doesn't decide the election!
Now, there is a possibility that pumping this metric does affect the election as some people vote Trump because they see him as the winning team, and Harris voters just stay home because they see a loss as inevitable.
But I don't think this is happening, since people don't lose anything voting for the losing team that they like, and just have no incentive to change their behavior after seeing the betting odds.
Anyway, I hope that clears up the betting odds, and why they're different from the polls. Let's see what happens next month!
Posted Using InLeo Alpha
Another factor to add is that users of these prediction markets have both the ability and the incentive to change their bets if they change their mind. What we have built with blockchain technology is a massive opt in market with serious financial incentives for the users.
Those who conduct polls can simply focus more on specific demographics or locations to favor the results towards a candidate of their choice. Regular centralized polls have no way to track individuals changing their mind.
PS: It is great to see you posting long form content on HIVE.
Cheers!
Good points. I think it'll be interesting to study how accurate they are at which point in the betting cycle.
This might have something to do with it:
https://politicalwire.com/2024/10/18/a-mystery-30-million-wave-of-pro-trump-bets/
That's certainly part of it, but it was trending far before that.
Also the new bets have the same rules as the others: be accurate or lose money.
Someone with big bags probably just hit a point where they're super confident in the result, and are now looking to cash in.
Wow a very interesting an also pretty confusing situation all together.
Yeah, but simple to summarize:
Betting odds = how many people are betting money on a certain outcome
Polls = how many people who were asked by pollsters favor which candidate
i see.
in theory people may not reveal the truth to pollsters, but in theory people should reveal their tru intentions when betting their own money.
People actually putting bets on their preferences vs. Mainstream media trying to sell that Kamala is someone with an IQ higher than a potato backed by the Democrat Military Industrial Complex 😎
Haha yes!
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