First, your odds don't make sense. It wouldn't be 30x more likely to rain than not on a particular day. However, this is a detail and not that important.
Second, though, is that people make highly uncertain bets all the time, and the price for those bets DOES fluctuate wildly over time.
For example, you can currently place bets at a number of sports books for the winner of next year's NBA finals. There is a TON of uncertainty (we don't even know who is going to be on teams, free agency and the draft haven't happened yet... not to mention injuries, player improvement, etc)
That uncertainty is priced into the bet, and people will take both sides of that bet.
As the year progresses and things happen, that price will fluctuate as we get more information and we get closer to the finals. The favorite might change, and a 200 to 1 might end up being a 10 to 1 by the time the finals gets here.
It isn't that the odds were WRONG at the earlier time, they just had less information. It doesn't mean the odds makers didn't understand what the state of the world was, or that they didn't take into account the uncertainty of what could happen.
I am not quite following you... the "price" of a bet is synonymous with the odds (i.e. they are two different ways of expressing the same information). For example, the money line price of something that has a 90% chance of winning would be `-900`... meaning you have to bet $900 to win $100.
No one has odds that say the Warriors (or any team) has a 90% chance of winning the NBA title. In fact, the current favorite (the Lakers) are listed at +350 (meaning you will win $450 on a $100 bet).
I am not sure what you mean by the 90% chance thing...
> For example, the money line price of something that has a 90% chance of winning would be `-900`... meaning you have to bet $900 to win $100.
This is what Nate saying, when he says Biden has a 90% chance of winning.
You intuit correctly that it would be ridiculous for anyone to offer odds like that for the NBA title one year out.
Why do you think it would be ridiculous? Likely because you intuit that there's too much uncertainty for a chance to be 90% for any team to win the NBA title.
Taleb's reasoning is similar, but for the election. 90% Biden win implies way too much certainty.
Second, though, is that people make highly uncertain bets all the time, and the price for those bets DOES fluctuate wildly over time.
For example, you can currently place bets at a number of sports books for the winner of next year's NBA finals. There is a TON of uncertainty (we don't even know who is going to be on teams, free agency and the draft haven't happened yet... not to mention injuries, player improvement, etc)
That uncertainty is priced into the bet, and people will take both sides of that bet.
As the year progresses and things happen, that price will fluctuate as we get more information and we get closer to the finals. The favorite might change, and a 200 to 1 might end up being a 10 to 1 by the time the finals gets here.
It isn't that the odds were WRONG at the earlier time, they just had less information. It doesn't mean the odds makers didn't understand what the state of the world was, or that they didn't take into account the uncertainty of what could happen.