This is a linkpost for https://jorgevelez.substack.com/p/the-mysterious-trump-buyers-on-polymarket-2
... and the signifcance of the bets has been to show that prediction markets, at least as presently constituted, aren't very useful for actually predicting events of any real significance. It's too easy for whackos to move the market to completely insane prices that don't reflect any realistic probability assessment. Being rich is definitely not incompatible with being irrational, and being inclined to gamble is probably negatively correlated with being well calibrated.
The promise of prediction markets was that they are either useful or allow you to take money from rich idiots. I’d say that was fulfilled.
Also, useful is very different from perfect. They are still very adequate for a large variety of questions.
Your comment would have more validity had the market not corrected the dislocation created by Theo. It took three weeks, but the market eventually corrected itself.
Another way to look at that is that during a relatively long stretch of time when people most needed an advance prediction, the market was out of whack, it got even more out of whack as the event approached, and a couple of days before the final resolution, it partially corrected. The headline question is sitting at 59.7 to 40.5 as I write this, and that's still way of line with every other prediction source.
Can't this only be judged in retrospect, and over a decent sample size? If all the markets did was reflect the public expert consensus, they wouldn't be very useful; the possibility that they're doing significantly better is still open.
(I'm assuming that by "every other prediction source" you mean everything other than prediction/betting markets, because it sounds like Polymarket is no longer out of line with the other markets. Betfair is the one I keep an eye on, and that's at 60/40 too.)
I've written a follow-up post on the mysterious Trump buyers on Polymarket. While mainstream media has extensively covered this story, it has overlooked some critical details—most notably, that this trader's bet on Trump is closer to $75 million USDC, making it the largest election market wager to date. Regardless of the outcome, Theo is poised to go down in history as the most significant bettor in prediction markets.
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