Avoiding bias in political trading is essential because personal beliefs can distort probability estimates more in politics than in almost any other prediction market topic.
Wishful Thinking
Wanting an outcome can make it feel more likely. Separate what you hope for from what the evidence shows.
Echo Chambers
Following only sources that agree with you narrows your view. Deliberately read credible sources from different perspectives.
A Simple Check
Ask: would I estimate the same probability if the candidates were swapped? If not, bias may be involved.
Worked Example
A trader favours a candidate trading at 40¢ and feels the true chance is 60%. Applying the swap test, they realise they would rate an identical opponent at about 45%. They revise their estimate to 45% and decide not to trade.
Key Takeaways
- Hope is not evidence.
- Read credible sources across perspectives.
- Use the swap test on your estimates.
- Skipping biased markets is a valid choice.