Political markets

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.

Author: Milan

In the spring of 2005, I graduated from the University of British Columbia with a degree in International Relations and a general focus in the area of environmental politics. In the fall of 2005, I began reading for an M.Phil in IR at Wadham College, Oxford. Outside school, I am very interested in photography, writing, and the outdoors. I am writing this blog to keep in touch with friends and family around the world, provide a more personal view of graduate student life in Oxford, and pass on some lessons I've learned here.

6 thoughts on “Political markets”

  1. 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.

  2. 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.

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