Soap bubble or wisdom of the crowd?
Posted: Thu Feb 13, 2025 4:47 am
In the United States, decision markets have been popular for years to predict the outcome of elections. The leading company is Intrade . Here you can speculate whether Obama will be re-elected as president. If you believe in this, you can buy shares. At the moment, the chance that Obama will win is estimated by the market at 58.3%.
Political stock markets were also organised in the Netherlands, for example in 2003 and 2006 by de Volkskrant (PAM ) and in 2010 by Z24 . Ultimately, these markets predicted about as well as most pollsters. On average, in recent years they have been off by about 10% or 15 seats. However, there was often one pollster who did better.
The question now is what works better: opinion polls or decision markets? Proponents japan telegram data emphasize that decision markets are a good way to extract information and knowledge from the 'crowd': everything is discounted in the price. Moreover, stock prices react quickly to new information and correct for new events, according to some even faster than opinion polls.
Critics point out that stock prices are by definition followers, especially when ordinary citizens invest in them. They base themselves on political information in newspapers and the media, and therefore also on opinion polls in the news. As a result, there is a risk that the stock markets react much more violently and emotionally to news and polls than the sentiment in the population.
Political stock markets were also organised in the Netherlands, for example in 2003 and 2006 by de Volkskrant (PAM ) and in 2010 by Z24 . Ultimately, these markets predicted about as well as most pollsters. On average, in recent years they have been off by about 10% or 15 seats. However, there was often one pollster who did better.
The question now is what works better: opinion polls or decision markets? Proponents japan telegram data emphasize that decision markets are a good way to extract information and knowledge from the 'crowd': everything is discounted in the price. Moreover, stock prices react quickly to new information and correct for new events, according to some even faster than opinion polls.
Critics point out that stock prices are by definition followers, especially when ordinary citizens invest in them. They base themselves on political information in newspapers and the media, and therefore also on opinion polls in the news. As a result, there is a risk that the stock markets react much more violently and emotionally to news and polls than the sentiment in the population.