This One Simple Trick Will Allow You to Make a Killing Betting on the Presidential Race

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Jim Tankersley examines the presidential odds at PredictWise today and concludes that punters are probably underestimating Hillary Clinton’s chances of winning. Why? Justin Wolfers explains that it’s likely due to something called “longshot bias”:

The favorite tends to win in betting markets more often than indicated by the odds. So if the markets say she’s a 47% chance to be president, history suggests that the true odds are a bit better than that.

….There’s another way to get at this though, which is simply to ask whether the odds make sense. I think the idea that Clinton is only a 75 percent chance to win the nomination is nuts — she’s essentially the only serious candidate running, and it’s now clear that her campaign is not going to implode. With any candidate there are risks that secrets may come out, but with Mrs. Clinton, we’ve had several decades for them to surface. So my (personal!) judgment is that she is at least an 85 percent chance to win the nomination, and maybe 90 percent is a more realistic assessment.

OK. But what I want to know is why the betting markets say that Democrats have a 58 percent chance of winning the presidency, but the combined chance of all the individual Democratic candidates is 63 percent. There must be some way to arbitrage this so that you’ll make money no matter what happens. Right?

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You just sent an incredible message: that quality journalism doesn't have to answer to advertisers, billionaires, or hedge funds; that newsrooms can eke out an existence thanks primarily to the generosity of its readers. That's so powerful. Especially during what's been called a "media extinction event" when those looking to make a profit from the news pull back, the Mother Jones community steps in.

The months and years ahead won't be easy. Far from it. But there's no one we'd rather face the big challenges with than you, our committed and passionate readers, and our team of fearless reporters who show up every day.

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