Election predictions are arbitrage-free: response to Taleb
Mathematical Finance
2019-07-04 v1 Probability
Abstract
Taleb (2018) claimed a novel approach to evaluating the quality of probabilistic election forecasts via no-arbitrage pricing techniques and argued that popular forecasts of the 2016 U.S. Presidential election had violated arbitrage boundaries. We show that under mild assumptions all such political forecasts are arbitrage-free and that the heuristic that Taleb's argument was based on is false.
Cite
@article{arxiv.1907.01576,
title = {Election predictions are arbitrage-free: response to Taleb},
author = {Aubrey Clayton},
journal= {arXiv preprint arXiv:1907.01576},
year = {2019}
}