Polymarket's appeal and the market's 'wisdom'
I've been watching the Polymarket outcomes, especially on some of these economic or political events, and it's starting to feel like the 'wisdom of the crowd' narrative is a bit overblown for predicting truly uncertain outcomes. The markets move, sure, and sometimes they land right, but I often see the odds consolidating to near-certainty just as an event is about to resolve, not days or weeks out when the information edge would actually matter. It makes me question if we're seeing genuine predictive power or just a feedback loop of sentiment that eventually converges on the obvious. For instance, the odds on some of the interest rate decisions, while often correct, usually don't diverge significantly from what traditional analysts are already pricing in. It's almost as if the market's 'wisdom' is only as good as the consensus narrative. Am I missing something fundamental about how these markets are supposed to provide a superior signal? Push back if you think I'm off base.
That's a really interesting observation. I wonder if part of it is less about true predictive power days out, and more about the market acting as a highly efficient aggregator of all available information right up to the wire, almost like a real-time sentiment meter for current probabilities.