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arXiv · 1907.01576

Election predictions are arbitrage-free: response to Taleb

Aubrey Clayton
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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.

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Aubrey Clayton. 2019-07-02. Election predictions are arbitrage-free: response to Taleb. https://arxiv.org/abs/1907.01576

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