Bryan Caplan  

Why I Think I Win My Bets

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Why Bryan Caplan almost always... Americans, on Average, Gain Bi...
I'm tempted to tell Scott, "You had me at 'Why Bryan Caplan wins almost all of his bets."*  But my story varies from his.  Scott begins:
Bryan almost always takes the consensus view in any bet.
Not really.  In general, I think "consensus views" on interesting questions tend to be innumerate and paranoid. 

Scott immediately adds:
The view a betting market would take, if one existed.
Betting market prices are hardly equivalent to "consensus views," though you could say betting markets reflect the consensus of the small subset of people willing to put their money where their mouths are.  But in any case, this is a circular explanation for why I win, because it doesn't explain how I ballpark a betting market position when there is no betting market.

Introspectively, two key practices account for most of my success.

1. I take the "outside view."  When predicting, I start with long-run averages, and presume the "latest news" is distracting trivia.  For example, when I made my unemployment bet with Tyler, I looked at all the unemployment data for 1948 to the present, and assumed the future would resemble the past.  As usual, it did.

2. I spurn hyperbole.  Human beings adore superlatives, but superlatives rarely apply to the real world.  So when I notice someone treating hyperbolic poetry as literal truth, I rush to wager.  For example, when John Podhoretz asserted that the Iran nuclear deal "effectively ensures that it will be a nuclear state with ballistic missiles in 10 years," I smelled hyperbole, and tried in vain to entice him put some money on it.

In slogan form: I owe my track record to numeracy and normalcy.  Step back, calm down, look at the numbers, and target thinkers who say, "This time it's different." 

* How frequently do I really win?  See my 2016 bet inventory.




COMMENTS (9 to date)
Dave Smith writes:

Good points, but I think you win your bets for two reasons:

1) you pick the bets. There must be some sort of selection bias here.
2) you are famous and people would bet you even if they knew you were going to win. people just want to be associated with you and perhaps get their names mentioned by you.

brad writes:

I think this actually matches what you said, but in my view you win because you bait people into taking stupid bets.

1) Person says ridiculous thing and ridiculously high level of confidence.

2) You call them on it and offer a bet.

3)They feel they cannot back down or they will lose face so they bet on a position that (at least to me) is obviously a bad bet. I can't think of a bet that you have made that I did not say when you made it "Bryan is very (65-75% chance on even money) likely to win this bet".

Cliff writes:

The above commentors have it much more correct than you. You make very few bets and only with people who have extreme positions.

Bryan R writes:

Isn't part of the point of Bryan's bets that the very "extreme" positions people take are wrong?

I don't see how you can complain that he wins a lot because he bets against those with extreme positions when that is part and parcel to the whole deal: he is betting on some more moderate result than they are.

As for him "picking" the bet; isn't that a 50-50 pick?

Davevanv writes:

You win your bets because you are a microstakes bum hunter.How do you think you'd do if you had a $10,000 minimum bet? What information is revealed by a $100 bet?

Bryan,
Are you taking bets on the question of whether Hillary will be indicted by the FBI within the next year? That would be fun.

Oops. Probably an indictment would come from DOJ, not FBI. Got to get the wording right; not my specialty. Anyway I'm a doubter.

Phil writes:

You win because you only bet bums

http://www.unz.com/isteve/bumhunting-as-the-economic-paradigm-of-the-21st-century/

James Hanley writes:

Since you bet against Clinton based on the betting markets, how are you feeling about that bet now? (I think that sounds snarky, but I don't mean it so. I'm sincerely curious whether you're updating your level of confidence on that one.)

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