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PaperclipPerfector  2d ago (text post)   10362 thread views

Culture War Roundup for the week of October 14, 2024

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Yes, but for a non-repeatable event it’s also very easy for a pollster to say they were right. After all, even someone who predicts a 95% likelihood of A winning can say “well, the 5% likelihood of B winning happened to be the outcome in this scenario, my forecast was in fact entirely correct” and this is completely unfalsifiable.

They were all wrong, but Nate was less wrong ,so that makes him the winner in this regard. His model was more accurate.

Sure, but this doesn't make sense in the context of prediction markets. Prediction markets host hundreds of predictions. We can look at the history of those predictions and see how well calibrated they are.

I don't believe the claim that prediction markets are "not accurate" would bear scrutiny.

Is probability even well-defined for a one-off event? It's not like we can random sample the multiverse on how the election actually went. At the same time, nothing is absolutely certain (supervolcano as October surprise!).

Maybe it makes sense from a Bayesian perspective: given the current knowledge of the system state (polls, voter registrations, demographics, maybe even volcanology reports) we can estimate the probability of a specific outcome. But a frequentist view seems nonsensical, even if a lot of predictions seem to present themselves that way.

One-off events are intractable. Kelly does not work on them.

I completely agree, the frequentist view is nonsensical. This is why forecasters need to be nailed down to a specific outcome (or ‘I don’t know / it’s too close to call’ but this has to be acknowledged as opting-out).

That's my main problem with Nate Silver's modelling.

There should be large error bars around the prediction that slowly close in as the predicted event approaches.

It shouldn't be "X% Trump, Y% Kamala," it should be "X% Trump, Y% Kamala, Z% irreducible uncertainty."

The logic is "if the election were held today then here's the probability." But... the elections won't be held today. That's the whole point of the prediction for a future event, and I think it behooves them to acknowledge that uncertainty is inherent to the modelling process.

If they'd included that back when it was Trump vs. Biden, the conserved probability would have accounted for Biden suddenly dropping out and wouldn't have broken the model instantly.

And if Nate trusts his model, there's a ton of money to be made in the prediction markets.

There's not a ton of money to be made if you believe the odds are 50/50. Prediction markets give Trump 60/40 odds, while Nate's model gives 50/50 odds. If your bankroll is $1M, then it's only rational to bet 167k, for an expected value of 40k. Not nothing, but not a ton of money either.

That also ignores other costs, like counterparty risk. Nate also has to deal with reputational risk: people might value his published models less if they thought he was making bets on markets that were influenced by his models. Since that's his main source of actual income, a bet would be substantially negative EV for him.

You have to look at their predictions in aggregate. If they predict 20 elections with a 95% chance for party A, and A wins 19 of those 20 elections, then yes they were accurate.

Even if that 1 election was a landslide for party B, the prediction method is accurate. People who say otherwise just aren’t accepting that it’s a percentage chance and not a poll.

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