I highly recommend following https://realcarlallen.substack.com/ - his forecasts seem far less volatile which appear to be more reflective of what a forecast should be.
I wonder how much of prediction markets are also animal spirits and not necessarily information.
Great article! Can you expand on why you believe the position limits on Predictit makes it a better forecaster than Polymarket? I would have expected better liquidity and volume to lead to better forecasts, at least based on their typical impact in financial asset pricing.
It's hard to know for sure. My prior is the typical benefits like high liquidity and low spread also matter here. I also believe there are big and sophisticated traders who play in Polymarket and to some extent the other offshore/ European platforms that move together. Though I could be wrong and maybe all those sites are hugely impacted by a few degens and wealthy partisan fanatics! The launch of Kalshi election markets should provide additional signal.
I highly recommend following https://realcarlallen.substack.com/ - his forecasts seem far less volatile which appear to be more reflective of what a forecast should be.
I wonder how much of prediction markets are also animal spirits and not necessarily information.
Thank you, I've subscribed
Great article! Can you expand on why you believe the position limits on Predictit makes it a better forecaster than Polymarket? I would have expected better liquidity and volume to lead to better forecasts, at least based on their typical impact in financial asset pricing.
Very difficult to manipulate, and not very responsive to beliefs of one or two traders with deep pockets
It's hard to know for sure. My prior is the typical benefits like high liquidity and low spread also matter here. I also believe there are big and sophisticated traders who play in Polymarket and to some extent the other offshore/ European platforms that move together. Though I could be wrong and maybe all those sites are hugely impacted by a few degens and wealthy partisan fanatics! The launch of Kalshi election markets should provide additional signal.