Analysis of Prediction Market Odds on Election Night

Quick Take

  • At the start of election night, prediction markets priced Trump’s odds of winning the election at 35-40%, while FiveThirtyEight’s model was at 11%
  • During election night Trump’s odds rose to as high as 80%, until quickly dropping to below 25% when Arizona flipped to the Democrats
  • Based on the available data, it looks like prediction markets overreacted to newly reported news. Arguably, this was the case in both directions (for and against Trump)

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