What is the difference between surveys and political prediction markets?
One of the major differences is that on political prediction markets the trader is trying to predict for whom the general public is going to vote for rather than expressing his own political preferences. Or: Different to standard surveys the question for the success orientated trader is not “what are you going to vote?” but “what do you think the public is going to vote?” Surveys show the actual political opinion quite well, but the result is very much dependent on the point of time the survey took place. This means they also do not allow a long term prognosis. Every prediction turns a representative survey into a not representative view of an expert. Political prediction markets on the other hand only need the determination of the voluntarily participating trader. There is no refusal and no dependency of margin of deviation on the number of participants. The critical mass is lower and with as few as 30-50 traders good predictions can be made.
