MB writes: I’ve always been of the view that the “wisdom of the crowd” hypothesis doesn’t work very well in the case of prediction markets for elections – because the number of insiders who have relevant information not available to anyone else is miniscule. One instance I followed closely was the Queensland state election – where the odds for the number of seats Labor would win very closely paralleled what the polls and the pundits were saying. I actually did have a bit of inside info, and I made about 1500 bucks, which I couldn’t have done if there’d been tons of people with access to such info. Possum’s piece in Crikey today, I think goes some way to confirming my view that the markets are basically parasitic on the polls because in the absence of any, punters went with “received wisdom”, which got the result spectacularly wrong.
Possum writes: If you were to look at the betting markets for the NT election last week, you’d be forgiven for thinking that the ALP had a greater chance of being abducted by the latest outbreak of NT UFO’s than they had of being beaten by the CLP. Yet, with no major pollster running pre-election surveys in the Territory, should we be at all surprised that the markets got it so wrong in terms of the chance of Labor retaining government?
As much as political polling is scorned as reducing important political issues down to little more than horse race commentary, it fulfills one fundamentally important role — it stops people talking sh-t.
From politicians to columnists, from reporters to your average Joe – political polling encourages all but the learned types at The Australian to keep it in their pants.
With no major polls in the Territory election, information about the election itself was dominated by party propaganda on the one hand and political commentators staring deeply into their navels on the other – usually finding little more than lint as a result, but lint dressed up as profundity none the less. Without polling information, election campaign analysis becomes an exercise in either wishful thinking or what ought to happen — and as we’ve seen in the Territory, theories on what ought to happen were well formed, plentiful, but mostly wrong. There is no substitute for the type of empirical reality that only polling can provide.
It’s a pretty simple rule — you can’t really analyse what you don’t really know.
What makes betting markets valuable is their capacity to aggregate all available sources of information to predict a result, but without polling information anchoring the market to some semblance of reality, without that knowledge of what people are actually thinking on the ground, the betting markets were left drifting in the breeze, ostensibly being guided by lint powered column inches telling us that Labor was a shoe in because, well, that’s what ought to happen.
So should we really be surprised that without political polls running in the Territory campaign, the markets were so out of whack with the result? While the markets may have gotten the end result right, the magnitude of the victory will probably come down to a few hundred votes — hardly the landslide that was predicted, and certainly not justifying 1/14 odds that some markets were offering.
Good information makes good markets, and there is no better information than good, independent polling. It provides far more than fodder for horse race political commentary, it provides certainty and knowledge and evidence for observable reality. And at the end of the day, isn’t observable reality what all good political commentary should be about?
It doesn’t stop everyone. Christopher Pearson, for example – recipient of Possum’s most famous smackdown!
… which is alluded to in the very next sentence. Sorry, should read the whole thing before posting …
Good information makes good markets.
It’s a basic rule of horseracing too and explains why the bookies have it over the punter. Better information with which to frame their markets.
As much as political polling is scorned as reducing important political issues down to little more than horse race commentary, it fulfills one fundamentally important role — it stops people talking sh-t.
haiku-san, I too was drawn like a blowfly to bullcrap…. to this very sentence.
Those words are exquisitely written, but I’m sorry to say that they seem to me a tad optimistic.
Empirical observation leads me to suspect that there is NO social force or social institution, which can “stop people talking sh-t”. If people stopped talking sh-t, they wouldn’t be people any more. Nowt queer as folks.
sayonara
In fairness to the markets shouldn’t they be given a chance to be tracked over time?
As opposed to snapshot-analysis I mean. These markets are young and dynamic. They need a dynamic tracking analysis imho. By way of analogy – if you took the state of the netroots out of context and froze it for all time then the lunar-right blogosphere would still be on top. You remember the Rathergate crowd of 2005.
Markets are becoming an increasingly maligned phenomenon I notice today*. But darlings I will still go to the barricades for them AND any convenient common means of exchange anyday.
I hope plenty of other libertarian and democratic socialists will too – and avoid market bashers like the plague on the market they are.
*Sear Galbraith
Is there an alternate proposition to this being advanced by anybody?
PC:
In the fullness of time you are indeed veracious, Possum.
Empirical correctness is its own reward.
http://www.superbrands.com.au/images/logos/30.jpg
Without the guidance of so much as a feral poll, the bookies were certainly way off the mark in setting their field. ALP-backing punters still collected but the odds were miserly. The prohibititive odds would have deterred all but the most determined punters. Apart from the savage slur upon their psephological finesse, maybe the bagmen didn’t have such a bad election afterall.
hello,
I am doing a school project and this is one of the questions so can you tell me why possims are important?? plz i would realy like to get a good mark thanx
Hello there Kaycee. You might have guessed this already, but the possum who’s writing here probably isn’t the kind of possum you have in mind for your project!
You could try here, here or here.
Those sites could help you with information, but they might not answer your question, so here’s another question that could help: what do possums eat? If you can find that out, it might help you to understand why they’re important.
It’s because possums and rabbits are deadly enemies, Kaycee. Rabbits are an imported pest which cause massive damage to Australia’s environment. Because they are imported, they have no natural enemies in the australian ecosystem.
Gough Whitlam (genuflect)realised that this was an enormous problem and if left unfixed, it could lead to a conservative take over of all states and territories. One of Gough’s (genuflect)first actions as Prime Minister was to set up a Rabbit Eradication Workshop Taskforce. This lead to the development of a biological weapon known as mixamytosis. By infecting possums wth this agent, it became possible to have possums become the natural enemy of Rabbits. The possums, under the effect of mixamytosis, would sneak into the rabbit’s holes and scare them out into the open. Thus allowing stage two of Gough’s (genuflect) plan to take effect.
Stage two of the plan was to have Kangaroos infected with a slightly different strain of the Mixamytosis virus kick the rabbits to death with their very large paws. Unfortunately, Stage 2 of the Gough (genuflect) Plan was never put into effect. There are a lot of theories why this never happened. Probably the most convincing theory alleges un-natural relationships between the Governor General of the time and an underage rabbit from St Kilda. (You might not want to mention this, I’m unsure of the libel laws where ever you may be)
Good luck with your assignment!!!
The Importance of Possums
Possums are an extremely important marsupial. They have had a great effect on the history of Australian marsupial history, and have caused economic, social, and political change.
Their ability to hibernate their young through massive, brutal, pulverising ice ages in varied urban locations such as Australia Post Express pouches, has led to their being listed as International World Heritage Zones.
The male of the species is larger and often has a reddish throat in bracketed patches (that is, in parentheses). The female, naturally, prefers parthenogenesis or a nice dry chardy. Young possums are known to emerge from the larval stage, through a chrysalis stage, finally, to yo, bum rush the stage.
To conclude, the possum is an extremly important animal. Without the possum we would all live in a possum-free world.
“Without the possum we would all live in a possum-free world.”
Not only that, but possims would continue to infiltrate every level of civil society. Possums are the only way to check the possim menace, as only they can tell the difference.
I would just like to say it wasn’t me, and my thesis has nothing to do with possums. Though there is a bunyip in it. OK? Good.
Dont you hate it when you forget to change your name back?
But watch out for zombie possums Kaycee like these ones, seen here dining the mortal remains of a natural history teacher who told his students to “oh, just ask around on the internet.”
The most significant difference between the polls and the betting markets IMO is something that many, including above have commented upon: polls are based on the question “who would you vote for today” while the betting markets are based on the question “who do you think will win the election”.
Indeed if you look at the polling, the “who will win” question polled much higher for the ALP than the “who will you vote for” all the way through the campaign.
There’s your lesson for you, Kaycee. The internet is made of banally sarcastic people who are bad and ought to be ashamed of themselves.
(Except for Klaus K. He’s to &%$*ing sincere for his own good).
Kaycee Davies,
as you’ve probably guessed, klaus k is a very pleasant and helpful person.
Some of the other creatures who live here, eat human children alive*. They use venom to defeat their enemies. Mr Liam mentioned banal sarcasm. There is another poster, Banal Hussein el Sarcasti, who is even more cruel.
* strangely, they are generally kind to marsupials, lizards and penguins.
Ahem, re the Ada Lovelace thread, even my comments about moderated comments seem to be stuck in a nested series of loops. Can some LP Mod step in and break the cycle?
This is really one of those questions that shows how little useful information there is on the web for a general audience. But far be it from me to deny help to those whose parents and teachers haven’t figured out that libraries are the natural home of children (or is that 1st year environmental science students?) with research assignments.