In forecasting, there are three types of models.
-
Models with predictors.
They use external variables — temperature, the economy, human behavior.
These models explain why something happens. -
Time‑series models.
They look only at the past values of the series.
They explain nothing, but often predict better. -
Hybrid models.
A combination of past dynamics and external factors.
Why is it sometimes better to use only a time series?
Because external variables may be unknown,
hard to measure, or unpredictable themselves.
Sometimes the goal is simply to predict, not to explain.
This is especially visible on Polymarket:
if predictors are unavailable or unreliable,
a simple dynamics model often works better.
The model is chosen by data, resources, and purpose —
not by elegance.
— S. Praevis