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An Interesting Election Perspective
Sep. 15th, 2004 07:16 pmFor those of you who haven't heard of the site, the Iowa Electronic Markets offer another perspective on the Presidential election, as well as other events, such as the Congressional races, and the Google IPO. The idea is that, using real money, people buy and sell outcomes of various future events like securities. If people have real money on the line, the theory goes, they will do the best they can to predict what's really going to happen, and various biases will average out. The whole thing is run by the business school at the University of Iowa.
I've been following the Presidential winner-take-all market. In that market, you can buy Kerry, Bush, or both. For each "share" of a candidate you buy, if that candidate wins the popular vote in November, you get a dollar. If the other candidate wins, you get nothing.
What's interesting is that people have been willing to pay more for Bush than for Kerry almost all the time since this market opened at the beginning of June. The candidates were very close in July and August, but Bush still led most of the time. Here's what I find very interesting: Kerry didn't get a post-convention bounce; Bush got a huge one. Kerry last traded at 42.5 cents; Bush, at 57.5.
For those of you who aren't familiar with this kind of thinking, let me put it another way: the market currently gives Bush a 57.5% chance of winning the popular vote. Kerry, conversely, has at 42.5% chance.
I can't really comment on the deeper meaning, other than to say that this is, and has been, very different from what the polls have said, even the most recent, post-RNC ones. The only other thing I can say is that Kerry seemed to be gaining ground up until the time I decided to vote for him.
I've been following the Presidential winner-take-all market. In that market, you can buy Kerry, Bush, or both. For each "share" of a candidate you buy, if that candidate wins the popular vote in November, you get a dollar. If the other candidate wins, you get nothing.
What's interesting is that people have been willing to pay more for Bush than for Kerry almost all the time since this market opened at the beginning of June. The candidates were very close in July and August, but Bush still led most of the time. Here's what I find very interesting: Kerry didn't get a post-convention bounce; Bush got a huge one. Kerry last traded at 42.5 cents; Bush, at 57.5.
For those of you who aren't familiar with this kind of thinking, let me put it another way: the market currently gives Bush a 57.5% chance of winning the popular vote. Kerry, conversely, has at 42.5% chance.
I can't really comment on the deeper meaning, other than to say that this is, and has been, very different from what the polls have said, even the most recent, post-RNC ones. The only other thing I can say is that Kerry seemed to be gaining ground up until the time I decided to vote for him.
