[mike777]

 MickyB, on 2012-September-11, 15:17, said:

That doesn't explain why Betfair has Obama at 68%. Whatever the "true odds", the 7% gap is bizarre.

can you arbitrage this?


sell at 68% and buy at 61%?

If the cost of the transaction is at 7% you wont be able to.

If less then clearly there is a hundred dollar/pound bill laying on the floor waiting for you to pickit up.

[semeai]

 MickyB, on 2012-September-11, 15:17, said:

That doesn't explain why Betfair has Obama at 68%. Whatever the "true odds", the 7% gap is bizarre.

Is there arbitrage to be had, or is there a large gap (or fee) at Betfair between betting the two different ways?

[MickyB]

You can lay Obama on Betfair at 67.5%, I believe the fee on winning markets for low-volume customers is 5%, 0.675*0.95 = 64.1%, so a 3% gap. That doesn't include intrade fees which are flat rates, I believe. So yes, there is, but probably not enough to make it worthwhile.

[semeai]

3% return in two months is pretty good

[dwar0123]

 semeai, on 2012-September-11, 15:42, said:

3% return in two months is pretty good

There is a limited amount of available shares before that gap closes.

[cherdano]

 hrothgar, on 2012-September-10, 14:17, said:

Its important to note that Silver himself states that his estimates are likely to be biased towards Obama at this point in time.

That's not correct. He points out that his model assumes that polls are currently biased towards Obama by a point or two.

[wyman]

 JLOGIC, on 2012-September-10, 21:34, said:

Trustin one source over the collective wisdom of people (as I am here, trusting 538/nate over intrade) is very dangerous, but nate has earned it. Dude is legit. Even with 1 election, he always simulates how the various states will go so you get a big sample and he is always very accurate. Dude is legit, and if you believe you can make a lot of money on intrade via him (for now, I assume he will eventually just set the market).

Fish.

Slander Nate, talk about how undervalued Romney is on intrade, and get that skrilla!

[phil_20686]

 jonottawa, on 2012-September-11, 15:02, said:

"When I was a young man about to go out into the world, my father says to me a very valuable thing. He says to me like this... "Son," the old guy says, "I am sorry that I am not able to bank roll you to a very large start, but not having any potatoes which to give you, I am now going to stake you to some very valuable advice. One of these days in your travels, a guy is going to come to you and show you a nice, brand new deck of cards on which the seal has not yet been broken. This man is going to offer to bet you that he can make the jack of spades jump out of that deck and squirt cider in your ear. Now son, you do not take this bet, for as sure as you stand there, you are going to wind up with an earful of cider."

The wisdom of Sky Masterton eh (1)

The reason intrade is closer to sixty, and that Nate is close to 85, is that nates methods are basically the answer to "What would the result be if the election were held tomorrow". In the real world a lot of stuff can happen between now and the election, and that can change the odds so much as to make that prediction irrelevant.

For example, suppose that the economy/stock market tanks in october again, like it did last year. If that happens that would move the odds a lot I would imagine. I don;t think this is a small possibility at all. I would say its at least 30% that we see another stock market crash like last october, and given the relation between stock markets and economies, that would be very bad for his election chances. There is still time for another debt ceiling stand off, that could hurt either side in a big way.

Anyway, my main point is that Nate is usually right, but the data he is using to come up with his prediction can change a lot between now and election day, in which case his % win will change a lot, because his % is what is the win chance for an election held tomorrow, rather than in november.

(1) This is a quote for guy's and dolls character Sky Masterton, in case anyone missed it.

[MickyB]

 phil_20686, on 2012-September-12, 07:39, said:

The wisdom of Sky Masterton eh (1)

The reason intrade is closer to sixty, and that Nate is close to 85, is that nates methods are basically the answer to "What would the result be if the election were held tomorrow".

He gives two sets of data - a forecast and a "now-cast". If the election was held tomorrow, he thinks it 88.2% that Obama would win. The 79.7% prediction is a forecast for Nov 6th.

[barmar]

It's amazing how relevant the book I just finished reading, "Thinking Fast and Slow" by Daniel Kahneman, seems to be to this discussion.

The chapter "Intuitions vs. Formulas" discusses the poor performance of professional forecasters (in almost all fields) versus simple algorithms. Forecasters are subject to biases, and often ignore salient facts. Formulas may be based on simple models, but they still tend to do better on average (this is the "Moneyball" philosophy -- it gave the Athletics a big advantage until other teams adopted it).

Much of the book is devoted to how people make decisions and judge probabilities. Humans are exceedingly poor at probability estimates, but posing the question in the form of a bet doesn't really make things much better. Bets are susceptible to framing effects -- the way you present the choices affects how you judge whether to take the bet. You can even present multiple forms of the bet, where they're mathematically equivalent, and most people will answer them differently -- it takes special effort to recognize that they're equivalent, and even when you do you still have to try hard to override the psychological illusion that affects your preferences (just as when you're shown an optical illusion, it's almost impossible to avoid being fooled, even when you know it's an illusion -- see here for one of the simplest and well known).

His chapter on regression to the mean explains why, when you find a forecaster who has done well in the past, he's likely not to live up to your expectations. Extreme results in any direction are most likely to be flukes, not representative.

[dwar0123]

 barmar, on 2012-September-12, 10:02, said:

Humans are exceedingly poor at probability estimates, but posing the question in the form of a bet doesn't really make things much better. Bets are susceptible to framing effects -- the way you present the choices affects how you judge whether to take the bet. You can even present multiple forms of the bet, where they're mathematically equivalent, and most people will answer them differently -- it takes special effort to recognize that they're equivalent, and even when you do you still have to try hard to override the psychological illusion that affects your preferences

Are you implying that the now-cast and the forecast for nov 6 are mathematically equivalent? If so, this could be interesting, I can see several reasons why I believe they are not.

[phil_20686]

Forecasts about the political landscape in two months, are about as reliable as weather forecasts. Lets be honest, the single biggest factor in this election will be the economy, if it continues to improve (albeit slowly) then it robs the republicans of ammuntion. If it should tank in the next few months, then obama will lose a huge number of votes.

The fate of the economy rests entirely with the FOMC, which, sadly, appears to consist almost entirely of lunatics. More than half of whom were appointed by Obama. If they vote against further QE this week, it will almost certainly kill off the US recovery, and possibly the global recovery aswell. I would not fancy Obama's chances then.

I think being more than 60% sure of the election, when I cannot be more than 60% sure of where the economy will be in November, is surely fairly irrational. I am sure that a serious republican candidate could be beating Obama easily.

Of course, "serious republican candidates" seem to be rarer than big foot, but that is a different story.

[phil_20686]

 MickyB, on 2012-September-12, 09:42, said:

He gives two sets of data - a forecast and a "now-cast". If the election was held tomorrow, he thinks it 88.2% that Obama would win. The 79.7% prediction is a forecast for Nov 6th.

Any future prediction is just basically a guess. It is saying something like "historically it is rare for voting percentages to move more than x percent, so it is rare that Romney could pull it back.

But we live in strange times. If you had asked me five years ago I would have predicted with near 100% certainty that there would never be another great depression because central bankers had learned the lessons of history. Turned out to be 100% wrong. The economy rests on a knife edge. If the world's important central banks make the wrong moves we will have five more years of stagnation. If they make the right moves the economy could be booming by November. I have never lived through such economic uncertainty, and frankly, it is doing my head in.

[BunnyGo]

 wyman, on 2012-September-11, 21:47, said:

Fish.

Slander Nate, talk about how undervalued Romney is on intrade, and get that skrilla!

I like to think that I'm somewhat in touch with modern slang and trends....I have no idea what the content or intent of this post was.

[barmar]

 dwar0123, on 2012-September-12, 10:25, said:

Are you implying that the now-cast and the forecast for nov 6 are mathematically equivalent? If so, this could be interesting, I can see several reasons why I believe they are not.

No, I was talking about semeai's post above where he talks about the form of the bets you use to describe any particular forecast. 8,000 to 2,000 versus 2,000 to 500.

[dwar0123]

 BunnyGo, on 2012-September-12, 18:36, said:

I like to think that I'm somewhat in touch with modern slang and trends....I have no idea what the content or intent of this post was.

He is implying that jlall is trying build demand on intrade for Obama so that jlall can profit by betting on Romney. This being a very common tactic on the internet when cash is involved.

Do not believe that is the case here at all, more likely just pointing out how jlall statements mirror's the statements of people who actually do such things.

Skrilla means money.

[wyman]

 dwar0123, on 2012-September-12, 19:23, said:

He is implying that jlall is trying build demand on intrade for Obama so that jlall can profit by betting on Romney. This being a very common tactic on the internet when cash is involved.

Do not believe that is the case here at all, more likely just pointing out how jlall statements mirror's the statements of people who actually do such things.

Skrilla means money.

Entirely the opposite.

I called JLall a fish (which is a poker term for a person who plays terribly and exploitably), since he is actually betting Obama heavy but he's on here telling people how underpriced Obama is and how awesome @fivethirtyeight is.

I was suggesting, jokingly, that he might be better off slandering Nate, touting (1. attempting to sell (something), typically by pestering people in an aggressive or bold manner: "Jim was touting his wares". 2. Attempting to persuade people of the merits of (someone or something).) Romney, but continuing to bet Obama, so that he might get that skrilla ($, €, ¥, 元, £, ฿).

[PassedOut]

Looking at specific polls can give a person pause. A strange question was asked of Ohio voters by Public Policy Polling:

Quote

Q15 Who do you think deserves more credit for the killing of Osama bin Laden: Barack Obama or Mitt Romney?

63%.....Barack Obama
06%.....Mitt Romney
31%.....Not sure

Down in the crosstabs you can find the responses of Ohio Republicans to this question:

Quote

Q15 Who do you think deserves more credit for the killing of Osama bin Laden: Barack Obama or Mitt Romney?

38%.....Barack Obama
15%.....Mitt Romney
47%.....Not sure

I'm guessing that the fact this question was asked at all convinced some folks that Mitt could have had something to do with it behind the scenes. But gawdalmighty!

[barmar]

 PassedOut, on 2012-September-12, 20:25, said:

I'm guessing that the fact this question was asked at all convinced some folks that Mitt could have had something to do with it behind the scenes. But gawdalmighty!

A combination of cognitive dissonance (Republicans don't like attributing something good to Obama) and the framing illusion.

[phil_20686]

 PassedOut, on 2012-September-12, 20:25, said:

Looking at specific polls can give a person pause. A strange question was asked of Ohio voters by Public Policy Polling:


Down in the crosstabs you can find the responses of Ohio Republicans to this question:


I'm guessing that the fact this question was asked at all convinced some folks that Mitt could have had something to do with it behind the scenes. But gawdalmighty!

Its not clear that this is an irrational poll at all. Suppose there are people who think that Obama was an impediment to the finding of Osama. That he was wishy washy on FP, and weak with Pakistan, and that OBL could have been found much quicker if only he had been a real man willing to invade pakistan much earlier. In that case, by merely having nothing to do with it, Romeny could, in some sense, be "more responsible" to it.

I am not endorsing this view .

Imo, presidents have almost nothing to do with these things. The intelligence does their thing and when they have solid Intel then the president gets told.