Political markets

2007-11-04

in Geek stuff, Internet matters, Politics

Ottawa River sunset

One interesting way to try to predict political outcomes is to allow people to bet on who will win and look at the odds that emerge. A number of sites are allowing people to do this for the 2008 American presidential election, with interesting results. Such sites include InTrade, Iowa Electronic Markets, and Casual Observer.

One option is to buy the right to $100 if a particular candidate wins the presidency. The cost of such a contract is reflective of the market’s presumed probability of that candidate winning. Here are some of the most recent prices:

Hillary Clinton: $46.70
Rudy Giuliani: $17.00
Mitt Romney: $9.50
Al Gore: $7.00
Barack Obama: $6.70
John McCain: $3.50

Newt Gingrich: $0.10

The people betting on Al Gore are probably wasting their money, given his repeated assertions that he will not be running. It will be interesting to see how the figures change when more candidates drop out, people choose running mates, and the two parties finally decide upon their nominations.

It is also possible to bet on which party will win the presidential vote. Bets on the Democrats are selling for $63.00. The Republicans only cost $36.40, reflecting much lower expectations about their probable electoral success.

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{ 5 comments… read them below or add one }

Tom November 4, 2007 at 1:06 pm
R.K. November 4, 2007 at 1:16 pm

Hillary got a big jump. She is up to $71.40.

R.K. November 4, 2007 at 1:18 pm

Sorry, that was for “Hillary Clinton to be the Democratic Presidential Nominee in 2008”

“Hillary Clinton to win 2008 US Presidential Election” is at $47.07.

. November 4, 2007 at 8:11 pm

Prediction Markets
August 30th, 2007 by Jonathan Yedidia

What does it mean to say that “I believe that Hillary Clinton has a 42% chance to win the 2008 U.S. Presidential election?” It used to be that some academics (called “frequentists”) had problems with this statement, because they only wanted to talk about probabilities for experiments that, at least in principle, could be run many times, to permit a reasonable estimate of the frequency of some event. I think hardly anybody is a frequentist anymore.

. January 11, 2008 at 3:20 pm

Why were the political futures markets so wrong about Obama and Clinton?
By Daniel Gross
Updated Tuesday, Jan. 8, 2008, at 10:12 PM ET

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