BETA
Chapter 1
The wisdom of crowds
Chapter 2
From Iowa bars to crypto blockchains
Chapter 3
Pricing the presidency and world events
Chapter 4
Beyond politics
Ch 1 · The wisdom of crowds
nic Prediction Markets
Put your money on the line (on the line!) / That's how we see the truth in real time (in real time!)
nic Trading a sixty-cent Kalshi contract represents a sixty percent probability, netting a forty-cent profit or expiring at zero.
Quiz
In a typical binary prediction market, what is the maximum payout of a winning contract?
Quiz
If a prediction market contract for a specific event is trading at 75 cents, what probability does the market assign to that event occurring?
nic In 1906, Francis Galton proved 800 collective guesses accurately estimated an ox's weight.
Quiz
Which British scientist first analyzed the 'wisdom of crowds' at an English county fair in 1906?
Quiz
In Francis Galton's famous 1906 crowd wisdom experiment, what animal's weight were fairgoers trying to guess?
Fun Fact
Crowd accuracy: At a 1906 English fair, the average of 800 crowd guesses for an ox's weight was off by less than one percent.
Quiz
What is a major limitation of traditional telephone polling compared to prediction markets?
Glossary
prediction market (noun)
A speculative market where participants trade contracts based on the outcomes of future events. In 2026, Kalshi released a study of 2.2 million resolved markets to demonstrate their forecasting accuracy.
A speculative market where participants trade contracts based on the outcomes of future events. In 2026, Kalshi released a study of 2.2 million resolved markets to demonstrate their forecasting accuracy.
Quiz
What term describes the financial risk that forces prediction market traders to be honest?
Quiz
Which bias occurs when poll respondents give answers they think are socially acceptable rather than their true beliefs?