Tuesday, June 5, 2007

want to know who will win in '08?

The evidence is in and overwhelming: The best predictor of who will win the presidential nominations and the election is not some expert or opinion poll, but future markets where contracts (bets?) on future events are traded. As mentioned before, it is the wisdom of crowds. The oldest and best known of these markets, the Iowa Electronic Market, has $1 contracts on who will win the nominations and as well as the November election. For example, as I write this, the current price quote for the Democratic WTA (winner take all) contract sells at $0.61 and the Republican WTA contract is $0.39. That means the smart money thinks there is a 61% chance some Democrat will take possession of the White House on January 22nd of 2009. Last September it was even money.

For the Democratic nomination, current price quotes are Clinton $0.49, Obama $0.29, Edwards $0.09, and "others" at $0.12. The Republican current prices are Giuliani $0.22, Romney $0.23, McCain $0.17, while the expensive contract is "others" $0.44.

Looks like maybe Hillary versus a Law & Order candidate?

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