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Remember, remember the 5th of November
Ron Paul has now passed Fred Thompson in the probability of winning the Republican nomination. According to Intrade, Paul has a probability of winning the nomination of 8.8%. (Guiliani (42.0%) and Romney (27.6%) are first and second.)
In closely related news, Paul raised $4.2 million yesterday. V.
Thanks to Barry Klein and Tim Groseclose for the tips.
Posted by Alex Tabarrok on November 6, 2007 at 12:46 PM in Data Source | Permalink
Comments
Hi there. Alex, there may be a mistake in this --people make many mistakes in poll reading by translating statistics into winning probabilities. If a poll shows someone ahead of another by 10 percentage points, it does not mean that he has only 10% more chances of winning. if Candidate A has 60% of the poll, I may bet that he has 93% of winning (depends on variance). Now this may apply to polls about who is going to win (as compared to who are you going to vote for).
Posted by: NNT at Nov 6, 2007 12:52:56 PM
So I wonder if there is an interesting bias...
Posted by: NNT at Nov 6, 2007 12:58:09 PM
Intrade is a prediction markets site, not a polling site. If you think that the numbers there are mistaken, cash in.
Posted by: Zubon at Nov 6, 2007 1:13:12 PM
@NNT, this is not a "popularity poll", Intrade makes predictions.
Secondly, I do not think this was a biased post. This a absolutely news-worthy, 4.2 million is the most money raised by any Republican in one day and it is simply astonishing.
I think that a lot of people like Ron Paul's ideals and the mainstream media has not recognized it yet.
Posted by: lt.milo at Nov 6, 2007 1:36:12 PM
Does anyone know if Paul is playing this thing to win or is an "issues candidate". You gotta play the primaries to win, does he have an ground game in the early states?
Posted by: GoodneesOfFit at Nov 6, 2007 1:54:11 PM
And, John McCain is now in second place in the polls, ahead of Romney and Thompson, not to mention
Paul and Huckabee, but is somehow sixth on intrade at about 7%, barely ahead of Huckabee. He is
rising in the polls now. Is intrade really that far off?
Posted by: Barkley Rosser at Nov 6, 2007 2:08:47 PM
NNT:
"Alex, there may be a mistake in this --people make many mistakes in poll reading by translating statistics into winning probabilities."
Exactly how stupid are you accusing Alex of being?
Posted by: josh at Nov 6, 2007 2:09:28 PM
This is Intrade's explanation of the prices:
Explanation of Contract Price
Rudy Giuliani to be the Republican Presidential Nominee in 2008
Last Price: 41.5
What does this mean?
41.5 means the market predicts there is a 41.5%
chance that this event happens.
Posted by: Eric G at Nov 6, 2007 2:31:30 PM
GoodneesOfFit: Ron Paul is running to win. He has been very clear on that, though it's taking some people some time to figure that out. He does have some ground in Iowa and NH, something like 7% in NH right before he spent money on tv and radio ads. It will be interesting to follow.
Posted by: John Goes at Nov 6, 2007 3:14:11 PM
I don't know how that got italicized.
Posted by: John Goes at Nov 6, 2007 3:14:53 PM
closing the tag.
Posted by: pio at Nov 6, 2007 3:22:48 PM
Through my magical powers, I've ended the italicization.
One advantages of Web 3.0 (circa 2014) is that commenting on blogs won't be quite so mysterious.
Posted by: Eric G at Nov 6, 2007 3:28:50 PM
does he have an ground game in the early states
Yes. He has Drew Ivers as campaign chairman in Iowa (guy has run a lot of campaigns before); he has a bunch of meetup groups in both Iowa and NH. There's a push to try and get a thousand volunteers to NH in the days and weeks leading up to the primary. He's also been running radio and now TV ads in both states (does that count as a ground game)?
I have high hopes for both Iowa and NH. In the former state, the low voter turnout (6% or so) typical of the caucuses favors a highly motivated core of supporters. In the latter state Paul should have as receptive an audience as any he is likely to find in the US, and the primary is an open one.
Posted by: bbartlog at Nov 6, 2007 4:12:07 PM
This is a prediction market, not a poll.
Posted by: jsalvati at Nov 6, 2007 4:30:48 PM
The problem is as follows: I estimate that to have a 8.8 pct probability of winning he needs to be between 16 and 40% in the polls. Are his polls so high?
Posted by: NNT at Nov 6, 2007 4:55:59 PM
This is strange. The problem is as follows: to have 9 pct prob. of winning he would need to have polls 15% between and 43%.
Ciao, NNT
Posted by: NNT at Nov 6, 2007 4:59:08 PM
I live in the relatively early state of Nevada, and there are *far* more Ron Paul signs up around Las Vegas than for *any* other candidate.
Posted by: Jacqueline at Nov 6, 2007 5:11:53 PM
Strange indeed. Makes one question the methodology of such polling, and it's long term predictive value.
Posted by: John Goes at Nov 6, 2007 5:12:59 PM
Any stats on the past accuracy of intrade predictions? (i.e. 2006 elections)
Posted by: Leif at Nov 6, 2007 5:52:52 PM
NNT, wouldn't the percentage needed depend on the number of candidates in the field? Given that there are six Republican candidates who have >5% chance of winning according to intrade, I should think that would change things.
Posted by: Conor at Nov 6, 2007 6:22:45 PM
...I'm pretty sure that somewhere in Proverbs, it says (in the King James):
Talkest not about what thou knowest not, especially on topical blogs, lest thine ass be shown.
Posted by: shawn at Nov 6, 2007 6:32:15 PM
umm...how can Taleb not be familiar with the notion of prediction markets? What'm I missing here?
Posted by: shawn at Nov 6, 2007 6:43:30 PM
Polls are like balance sheets, they only capture the present (and dinosaur land line phone polls can be as misleading as Enron balance sheets).
Quotes from Intrade are of binary options. Options capture both the present and the future.
Posted by: Jay at Nov 6, 2007 7:36:23 PM
"This is strange. The problem is as follows: to have 9 pct prob. of winning he would need to have polls 15% between and 43%."
NNT, would you please answer one question for us.
Are you getting laid off by Moody's, S&P, or Fitch, because no one wants to buy your ratings of structured ABS products anymore?
Posted by: Jay at Nov 6, 2007 7:58:43 PM
The market is not exactly liquid. Let's consider the possibility that Paul's Internet-savvy supporters are bidding up his Intrade contracts to make him appear to important people far more likely to win than could possibly be the case (SERIOUSLY). (Or the closely related scenario that Paul's Intrade-aware supporters are buying the contracts in the self-deceptive optimism that he has a chance). That's a lot cheaper than a few TV or radio ads and it packs a lot more punch, among nerds at least. To sell these contracts you'd have to wait something like 6 months to get a ~8% ROI: i.e., barely worth it.
I say let's bid it up even more...slowly.
Posted by: Paul N at Nov 6, 2007 8:36:06 PM
