edition.cnn.com
Prediction Markets Fail to Predict New Pope
Online betting sites Polymarket and Kalshi incorrectly predicted the election of Robert Prevost as Pope Leo XIV, with Prevost initially given only a 1-2% chance of winning, highlighting the limitations of prediction markets in events with limited data and opaque processes.
- What factors contributed to the significant inaccuracy of prediction markets in forecasting the outcome of the recent Papal conclave?
- Polymarket and Kalshi, online betting sites, incorrectly predicted the outcome of the Papal conclave. One user on Polymarket turned a \$1,000 bet into \$63,683 profit by correctly betting on Robert Prevost, who was given only a 1-2% chance of winning.
- What adjustments or considerations should be integrated into future prediction market models to account for unpredictable events driven by subjective factors, as exemplified by the Papal conclave?
- Future prediction markets should acknowledge the inherent unpredictability of events influenced by factors beyond quantifiable data. The papal election demonstrates that even in liquid markets, unforeseen circumstances and subjective elements can significantly impact outcomes.
- How does the lack of available data and the opaque nature of the papal election process affect the accuracy of prediction markets compared to other events such as national elections or sports games?
- The inaccuracy highlights the limitations of prediction markets, especially in events with limited data and opaque processes like papal elections. Unlike sports or national elections with abundant data, predicting papal elections is hampered by scarce information and the secretive nature of the conclave.
Cognitive Concepts
Framing Bias
The framing emphasizes the prediction markets' failure, portraying them as unreliable and highlighting the unexpected outcome as a major upset. This focus downplays other potential interpretations, such as the inherent difficulty in predicting such an event, or the possibility that the markets were not designed to predict events influenced by faith and divine inspiration.
Language Bias
The language used is generally neutral, but phrases such as "blindsided," "long shot," and "wily one" convey a sense of surprise and even a slightly dismissive tone toward the prediction markets' inability to accurately predict the outcome. More neutral alternatives might include "unexpected result," "low probability," and "unpredictable."
Bias by Omission
The article focuses heavily on the prediction market's failure to predict the new Pope, but omits discussion of other factors that could have influenced the outcome, such as the complex dynamics within the conclave and the secretive nature of the selection process. While it mentions some potential candidates, it doesn't delve into the reasons why Prevost ultimately prevailed, leaving a significant gap in understanding.
False Dichotomy
The article presents a false dichotomy between the wisdom of crowds (represented by prediction markets) and the influence of the Holy Spirit. It implies that these are mutually exclusive forces, ignoring other factors, such as the inherent limitations of prediction markets in unpredictable events and the complexities of the papal election process.