Strengthening Constitutional Self-Government

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Iowa Electronic Markets

Lucas Morel brings the Iowa Electronic Markets to our attention. Says Lucas: "For what it’s (literally) worth, check out the graph of the ’2004 US Presidential Election Winner Takes All Market.’ This on-line political futures market is run by the faculty at the University of Iowa Tippie College of Business. Anyone can ’play’ this market with real money, buying and selling contracts tied to real-world events--the presidential election being one of them. The aforementioned graph shows the history of ’bid’ amounts for contract payoffs to be determined by the popular vote cast (not electoral colege outcome) in the 2004 U.S. Presidential Election. After the election, a holder of a contract for Kerry/Edwards will receive $1 if the Democratic Party nominee receives the most popular votes in the 2004 U.S. Presidential election, $0 otherwise. Ditto for Bush/Cheney contracts. As of yesterday, the closing price for a Kerry contract (DEMO4) was $0.402, compared with $0.597 for Bush (REP04). For more info, see the Iowa Electronic Market." And here is the graph he mentions.

Discussions - 2 Comments

before experiencing excessive confidence, check out the graph for 2000:

http://www.biz.uiowa.edu/iem/graphs/pres00_WTA.gif

The Tradesports markets (found on the Intrade system) are a bit deeper and more active. The comparable contract to the Iowa one is the PRESIDENT.GWBUSH2004 winner-take-all contract. You can find the link here.

Note that, in both cases, the "price" is interpreted as the market’s estimate of a GWB win. The Intrade page has similar contracts (though more thinly traded) for each state, and a few other interesting instruments. Click on a contract and see a pop-up summary for the contract including a timeline graph.

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