I Win My Cruz Bet with Steve Pearlstein
By Bryan Caplan
In early February, noted journalist and GMU professor Steve Pearlstein bet me $50 at even odds that Ted Cruz would win the Republican nomination. I have now officially won.
Why did I make this bet? Simple: At the time, betting markets gave Cruz about a 10% chance of winning. Pearlstein claimed to know Cruz was very likely to win, so I bet him. Soon after we made the bet, Cruz rebounded, peaking at 34% in mid-April, marginally shaking my confidence. But nothing came of it in the end.
My final assessment: I have great respect for Pearlstein’s knowledge of American politics. I think he did know more than betting markets. But he didn’t know enough to see a 10% probability in the market and conclude the true probability exceeded 50%.