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2 posts found
Nov 07, 2024
acx
22 min 2,985 words Comments pending
Scott Alexander praises Polymarket's election success but argues their Trump odds were mispriced, explaining why Trump's win doesn't significantly validate their numbers over other forecasters. Longer summary
Scott Alexander congratulates Polymarket for their success during the recent election, but argues that their Trump shares were mispriced by about ten cents. He uses Bayes' Theorem to explain why Trump's victory doesn't significantly vindicate Polymarket's numbers. Scott compares the situation to non-money forecasters like Metaculus versus real-money markets like Polymarket, explaining why he initially trusted the former more. He discusses the impact of a large bettor named Theo on Polymarket's odds and addresses several objections to his argument. Scott concludes that while prediction markets are valuable, they can sometimes fail and require critical thinking. Shorter summary
Jun 19, 2014
ssc
2 min 220 words 57 comments
Scott Alexander defends an economic principle often mocked in jokes, explaining its validity when applied to long-standing, seemingly obvious financial opportunities. Longer summary
Scott Alexander critiques a common joke about economists dismissing free money on the ground. He argues that the underlying economic principle, when phrased more realistically, is actually correct and useful. The post explains that while it's possible to find money just dropped, it's highly unlikely for a bill to remain unclaimed in a busy area for an extended period. This principle warns against seemingly easy, no-risk money-making opportunities that have been available for a while, suggesting they may be more complicated or risky than they appear. Shorter summary