Political polls versus prediction markets and surveys
Political scientists often complain about opinion polls, as do politicians and analysts. Polls are costly and inefficient. Polls are out-of-date as soon as they are published. And, given the great variability from one poll to the next, we must wonder why election forecasters rely on opinion polls as their primary data source.
Prediction markets provide a meaningful alternative to political opinion polls. We say prediction markets are better than polls because prediction markets can respond to all factors relevant to an election. While opinion polls try to anticipate the behavior of likely voters on election day, prediction markets consider voting practices and contingencies as well as voter intentions. Prediction markets can also reflect voter demographics and economic conditions.
We say prediction markets are better than polls because prediction markets are fast to respond to current events. Prediction markets provide relevant, up-to-date information, responding to all events in the public sphere.
Many argue that prediction markets reflect collective information across all people willing to place bets on the outcomes of political contests. Anything known to the public can affect prediction market prices. Prediction markets reflect the "wisdom of the crowd."
Methods of election forecasting audio:
With the Georgia runoff elections of January 2021, The Virtual Tout® event forecasting service introduced prediction surveys, which attempt to combine the best aspects of political polls and prediction markets. This figure provides a summary of preference surveys (polls), prediction surveys, and prediction markets.
Comparing forecasts audio:
