Understanding cognitive biases and the tactics used by both politicians and the mainstream media to influence your thoughts will help you avoid these pitfalls and make better decisions when betting on political events on betting markets like PredictIt. Having the facts will make our predictions, and returns, more accurate, but our own cognitive biases often get in the way even before third parties get involved and once something is established in our minds, it can be much more difficult to change.
The three most common cognitive biases are used to sway public opinion, and ultimately election outcomes, by distorting our perspective. They are confirmation bias, coverage bias and concision bias.
Confirmation bias involves favoring or seeking out information that affirms pre-existing beliefs that you have. In politics, this plays out in people becoming overly rigid in their political opinions, even when presented with conflicting information, and leads to massive partisan divides and an inability to make progress within a bipartisan system.
Considering recent heightened partisanship in the American political ecosystem, researchers have conducted studies to determine the role that confirmation bias is playing. In one experiment, participants chose to either support or oppose a given issue. They were then presented with evidence that was conflicting or affirming, and in all scenarios participants were most likely to stick with their initial decisions. Of those presented with conflicting evidence, just one in five changed their stance. Participants even became more confident in their initial decisions.
Before making trades on a political betting market, be sure to ask yourself if you might be a victim of your own confirmation bias. Are you ignoring conflicting information that might be right in front of you? Have you gone outside of your normal circle of influence to gather information? These are things you’ll want to consider in order to avoid this kind of bias and make more successful political bets.
The second bias in politics is coverage bias, and it happens with the media disproportionately covers certain politicians or topics to fit their narrative or what boosts ratings the most. In some cases, media outlets even twist stories to fit a pre-determined narrative.
Research analyzing media coverage on former president Trump’s 2017 travel ban found that primetime media hosts varied drastically in tone, phrasing and facts presented to their audiences to align with specific partisan agendas. Making yourself aware of the partisan agenda of a media source can help you better understand the coverage bias you may be consuming and avoid its pitfalls when making decisions. As you can imagine, coverage bias can quickly lead to confirmation bias if you’re only seeking out information from specific sources you agree with. In order to overcome coverage bias, make sure you follow a wide variety of sources, even those that you may not ideologically agree with.
The last main area of cognitive bias that we will cover here in relation to political betting is concision bias. This is where politicians or the media selectively focus on “sound bites” and pass over more nuanced – yet often very important – information. Politicians use sound bites because they’re easy for the media to use and easy for voters to understand and remember in the long run. But, when taken in isolation, these bites leave out important context and nuance, which can turn a popular idea into a polarizing talking point.
These are all flawed ways of thinking about a policy or idea and should be avoided, especially in a political betting market. The best way to avoid one of these pitfalls is simply to be aware of them and how the information you’re consuming (or not consuming) might be impacting your political betting decisions.