Midas Oracle .ORG » US political elections

State Polls vs. Prediction Markets — 2008 US Presidential Election Prediction

Chris F. Masse — Tue, 04 Nov 2008 15:13:50 +0000

Here are the latest (and last) state polls and prediction market probabilities.

I am writing this post at 10:00 am —on Tuesday, November 4, 2008.

Contents

a visual roundup of the prediction market probabilities for the 2008 US electoral college
the latest news about the race for the White House
a visual roundup of various electoral maps based on state polls
more prediction market probabilities

- This is a dynamic electoral map from InTrade, which updates itself each time you refresh this webpage. Click on the image, and open the website (ElectoralMarkets.com) in another browser tab to get the bigger version. – [Feed readers: Download this webpage to visualize this InTrade widget, since it doesn't display within feed readers.]

- This is a dynamic electoral map from InTrade, which updates itself each time you refresh this webpage. – [Feed readers: Download this webpage to visualize this InTrade widget, since it doesn't display within feed readers.]

-
- This is a dynamic electoral map from HubDub, which updates itself each time you refresh this webpage. – [The HubDub dynamic charts listed below go into feeds.]

- HubDub’s prediction markets on the 2008 electoral college:

LATEST NEWS

- Rush to Memeorandum, the Drudge Report and Real Clear Politics to check what are the most talked about issues of the day.

- The (sad) death of Barack Obama’s grandmother has reminded the voters that the Democratic nominee is both “black” (African-American) and “white” (Caucasian). That might reassure some white voters, and could diminish a bit the so-called “Bradley Effect” —which I don’t believe is a factor in this presidential race, anyway.

- The 2 November surprises (Barack Obama’s aunt is an “illegal alien” + Barack Obama believes in the usefulness of very high green taxes) have probably damaged Barack Obama’s attractiveness with the voters who believe in strict immigration control and the virtues of free markets.

- The US stock markets have (probably, temporarily) stopped spiraling into the abyss. (John McCain became more unpopular each time the stocks went down, these last weeks. So, when Wall Street is doing OK, it won’t help Barack Obama, additionally.)

- Beware the exit polls, they have proved to be somewhat unreliable, in the past. They have a Democratic bias.

- As for how this historic day will roll out, check Nate Slver‘s railroad at NewsWeek.

STATE POLLS

CNN:

Pollster:

Electoral-Vote.com:

Nate Silver:

PollTrack:

MORE PREDICTION MARKET PROBABILITIES

#1. Explainer On Prediction Markets

A prediction market is a market for a contract that yields payments based on the outcome of a partially uncertain future event, such as an election. A contract pays $100 only if candidate X wins the election, and $0 otherwise. When the market price of an X contract is $60, the prediction market believes that candidate X has a 60% chance of winning the election. The price of this event derivative represents the imputed perceived likelihood of the partially uncertain event (i.e., its aggregated expected probability). A 60% probability means that, in a series of events each with a 60% probability, the favored outcome is expected to occur 60 times out of 100, and the unfavored outcome is expected to occur 40 times out of 100.

Each prediction exchange organizes its own set of real-money and/or play-money markets, using either a CDA or a MSR mechanism —with or without an automated market maker.

Prediction markets enable us to attain collective intelligence. Prediction markets produce dynamic, objective probabilistic predictions on the outcomes of future events by aggregating disparate pieces of information that the traders bring when they agree on prices. The event derivative traders are informed by the primary indicators (i.e., the primary sources of information), like the polls, for instance. These informed speculators then execute their transactions based on their anticipations about the future —anticipations that will be either confirmed or infirmed.

The value of a set of prediction markets consists in the added accuracy that these prediction markets provide relative to the other forecasting mechanisms, times the value of accuracy in improved decisions, minus the cost of maintaining these prediction markets, relative to the cost of the other forecasting mechanisms. According to Robin Hanson, a highly accurate prediction market has little value if some other forecasting mechanism(s) can provide similar accuracy at a lower cost, or if very few substantial decisions are influenced by accurate forecasts on its topic.

More Info:

- The Best Resources On Prediction Markets = The Best External Web Links + The Best Midas Oracle Posts

- Prediction Market Science

- The Midas Oracle Explainers On Prediction Markets

- All The Midas Oracle Explainers On Prediction Markets

#2. Objective Probabilistic Predictions = Charts Of Prediction Markets

- Listed below are the odds produced by the prediction exchanges. If you are interested in the predictions, we advise you to have a close look, first, at the real-money prediction markets (InTrade, TradeSports, BetFair and the Iowa Electronic Markets). Now, if you want to have real fun interacting with the news, we recommend that you trade on the play-money prediction markets (HubDub and NewsFutures).

- If you want to visit one of those prediction exchanges, put your mouse on the selected dynamic chart, right-click, and open the link in another browser tab.

2008 US Elections

InTrade

2008 US Electoral College

2008 US Presidential Elections – By State

- To get to the InTrade prediction market webpage for a specific state, right-click the state link, and open it in another browser tab.

State of Alabama – Democratic – Republican
State of Alaska – Democratic – Republican
State of Arizona – Democratic – Republican
State of Arkansas – Democratic – Republican
State of California – Democratic – Republican
State of Colorado – Democratic – Republican
District of Columbia – Democratic – Republican
State of Connecticut – Democratic – Republican
State of Delaware – Democratic – Republican
State of Florida – Democratic – Republican
State of Georgia – Democratic – Republican
State of Hawaii – Democratic – Republican
State of Idaho – Democratic – Republican
State of Illinois – Democratic – Republican
State of Indiana – Democratic – Republican
State of Iowa – Democratic – Republican
State of Kansas – Democratic – Republican
Commonwealth of Kentucky – Democratic – Republican
State of Louisiana – Democratic – Republican
State of Maine – Democratic – Republican
State of Maryland – Democratic – Republican
Commonwealth of Massachusetts – Democratic – Republican
State of Michigan – Democratic – Republican
State of Minnesota – Democratic - Republican
State of Mississippi – Democratic – Republican
State of Missouri – Democratic – Republican
State of Montana – Democratic – Republican
State of Nebraska – Democratic – Republican
State of Nevada – Democratic – Republican
State of New Hampshire – Democratic – Republican
State of New Jersey – Democratic – Republican
State of New Mexico – Democratic – Republican
State of New York – Democratic – Republican
State of North Carolina – Democratic – Republican
State of North Dakota – Democratic – Republican
State of Ohio – Democratic – Republican
State of Oklahoma – Democratic - Republican
State of Oregon – Democratic – Republican
Commonwealth of Pennsylvania – Democratic – Republican
State of Rhode Island – Democratic – Republican
State of South Carolina – Democratic – Republican
State of South Dakota – Democratic – Republican
State of Tennessee – Democratic – Republican
State of Texas – Democratic – Republican
State of Utah – Democratic – Republican
State of Vermont – Democratic – Republican
Commonwealth of Virginia – Democratic – Republican
State of Washington – Democratic – Republican
State of West Virginia – Democratic – Republican
State of Wisconsin – Democratic – Republican
State of Wyoming – Democratic – Republican

Source:

- The electoral map widget is from InTrade .COM.

- InTrade .COM.

- All the charts below are also dynamic —they update themselves each time you open this webpage. – [The InTrade dynamic charts listed below go into feeds.]

2008 US Presidential Election Winner – Individual

2008 US Presidential Election Winner – Political Party

2008 US Congressional Elections Winner – Political Party

2008 US Senate Control

2008 US House Of Representatives Control

Sources:
- The dynamic, compound prediction market charts are from InTrade .COM.
- The individual charts, however, are from InTrade .COM v2. We will later transition to the charts from InTrade .COM when the charting quality of their widgets improves.
- We are also waiting to be able to hot-link to the advanced charts of InTrade .COM.

BetFair

Winning Party

Next US President

- This is a dynamic compound chart from BetFair, which updates itself each time you refresh this webpage. – [Feed readers: Download this webpage to visualize this BetFair widget, since it doesn't display within feed readers.]

Source:

- BetFair Politics Zone

- BetFair Chart Widgets – [They are based on Flash, a shitty technology that doesn't go into feeds.]

Iowa Electronic Markets

2008 U.S. Presidential Election Winner-Take-All Market

2008 U.S. Presidential Election Vote Share Market

- Source: Iowa Electronic Markets

HubDub

2008 US Presidential Elections

- This is a dynamic electoral map from HubDub, which updates itself each time you refresh this webpage. – [The HubDub dynamic charts listed below go into feeds.]

- HubDub’s prediction markets on the 2008 electoral college:

- This is a dynamic compound chart from HubDub, which updates itself each time you refresh this webpage. – [The HubDub dynamic chart listed below go into feeds.]

Who will win the 2008 US Presidential Election?

2008 US Senate Elections

What will be the number of Democratic Seats in the Senate after the 08 Elections?

2008 US House Of Representatives Elections

What will be the number of Democratic Seats in House of Representatives after 08 Elections?

NewsFutures

Next US President Will Be Democratic.

Â© NewsFutures

Next US President Will Be Republican.

Â© NewsFutures

Swing States For The 2008 US Presidential Elections

- 2008 Electoral College

- NewsFutures and Bet2Give used to have chart widgets on the US primaries, which didn’t go into feed readers. We are waiting for their next chart widgets.

Resources on US Politics

- CNN – US Political Dashboard

- CNN – US Electoral Map

- Yahoo! News – US Political Dashboard

- Electoral-Vote.com – Polls

- Real Clear Politics – Polls

- Five Thirty Eight – Polls

- Pollster – Polls

- Poll Track – Polls

- Wikipedia – Polls

- Wikipedia – 2008 US Presidential Elections

- Wikipedia – 2008 US House Of Representatives Elections

- Wikipedia – 2008 US Senate Elections

- Wikipedia – 2008 US Gubernatorial Elections

Other Prediction Markets Related To The 2008 US Presidential Elections

At what level will the Dow Jones Industrial Average close on Election Day?

The Prediction Exchanges

- List of the main real-money and play-money prediction exchanges (betting exchanges) at Midas Oracle

- Complete list of the real-money and play-money prediction exchanges (betting exchanges) at Midas Oracle

- Complete list of the real-money and play-money prediction exchanges at CFM

-
[This post was cross-posted from Midas Oracle .COM.]

2008 US electoral map prediction for the 2008 US presidential elections

Chris F. Masse — Thu, 23 Oct 2008 16:21:45 +0000

Folks,

IMPORTANT NOTE:

- Till Election Day, this present blog (Midas Oracle .ORG) is going to update you once in a while about the horse race thru the lens of the prediction markets.

- Additionally, the other blog (Midas Oracle .COM) is going to publish many posts per day about the US elections (scheduled for Tuesday November 4, 2008), as seen by the prediction markets —starting tomorrow morning. We will also cover many other prediction markets on non-political topics —when we think that they bring an interesting Ã©clairage ( ).

- DO SUBSCRIBE TO THE OTHER BLOG, RIGHT NOW: http://www.midasoracle.com/feed/

- Use Google Reader to subscribe to blogs.

- Pssttt… If you don’t want to subscribe to the other blog, and want to stay with this present blog, don’t worry, that’s OK, we will continue to update you here with everything you should know about the prediction markets (including the US elections). The other blog is meant to bring much more to the news junkies, without bothering the readership of this present blog. So, if you choose to limit yourself to this present blog, that’s fine with us, and we will make sure you don’t miss anything important.

#1. Explainer On Prediction Markets

A prediction market is a market for a contract that yields payments based on the outcome of a partially uncertain future event, such as an election. A contract pays $100 only if candidate X wins the election, and $0 otherwise. When the market price of an X contract is $60, the prediction market believes that candidate X has a 60% chance of winning the election. The price of this event derivative represents the imputed perceived likelihood of this partially uncertain event (i.e., its aggregated expected probability). A 60% probability means that, in a series of events each with a 60% probability, the favored outcome is expected to occur 60 times out of 100, and the unfavored outcome is expected to occur 40 times out of 100.

Each prediction exchange organizes its own set of real-money and/or play-money markets, using either a CDA or a MSR mechanism —with or without an automated market maker.

More Info:

- The Best Resources On Prediction Markets = The Best External Web Links + The Best Midas Oracle Posts

- Prediction Market Science

- The Midas Oracle Explainers On Prediction Markets

- All The Midas Oracle Explainers On Prediction Markets

#2. Objective Probabilistic Predictions = Charts Of Prediction Markets

- Listed below are the odds produced by the prediction exchanges. If you are interested in the predictions, we advise you to have a close look, first, at the real-money prediction markets (InTrade, BetFair and the Iowa Electronic Markets). Now, if you want to have real fun interacting with the news, we recommend that you trade on the play-money prediction markets (HubDub and NewsFutures).

- If you want to visit one of those prediction exchanges, put your mouse on the selected dynamic chart, right-click, and open the link in another browser tab.

2008 US Elections

InTrade

2008 US Electoral College

- This is a dynamic electoral map, which updates itself each time you refresh this webpage. Click on the image, and open the website (ElectoralMarkets.com) in another browser tab to get the bigger version. – [Feed readers: Download this webpage to visualize this InTrade widget, since it doesn't display within feed readers.]

- This is a dynamic electoral map, which updates itself each time you refresh this webpage. – [Feed readers: Download this webpage to visualize this InTrade widget, since it doesn't display within feed readers.]

2008 US Presidential Elections – By State

- To get to the InTrade prediction market webpage for a specific state, right-click the state link, and open it in another browser tab.

State of Alabama – Democratic – Republican
State of Alaska – Democratic – Republican
State of Arizona – Democratic – Republican
State of Arkansas – Democratic – Republican
State of California – Democratic – Republican
State of Colorado – Democratic – Republican
District of Columbia – Democratic – Republican
State of Connecticut – Democratic – Republican
State of Delaware – Democratic – Republican
State of Florida – Democratic – Republican
State of Georgia – Democratic – Republican
State of Hawaii – Democratic – Republican
State of Idaho – Democratic – Republican
State of Illinois – Democratic – Republican
State of Indiana – Democratic – Republican
State of Iowa – Democratic – Republican
State of Kansas – Democratic – Republican
Commonwealth of Kentucky – Democratic – Republican
State of Louisiana – Democratic – Republican
State of Maine – Democratic – Republican
State of Maryland – Democratic – Republican
Commonwealth of Massachusetts – Democratic – Republican
State of Michigan – Democratic – Republican
State of Minnesota – Democratic - Republican
State of Mississippi – Democratic – Republican
State of Missouri – Democratic – Republican
State of Montana – Democratic – Republican
State of Nebraska – Democratic – Republican
State of Nevada – Democratic – Republican
State of New Hampshire – Democratic – Republican
State of New Jersey – Democratic – Republican
State of New Mexico – Democratic – Republican
State of New York – Democratic – Republican
State of North Carolina – Democratic – Republican
State of North Dakota – Democratic – Republican
State of Ohio – Democratic – Republican
State of Oklahoma – Democratic - Republican
State of Oregon – Democratic – Republican
Commonwealth of Pennsylvania – Democratic – Republican
State of Rhode Island – Democratic – Republican
State of South Carolina – Democratic – Republican
State of South Dakota – Democratic – Republican
State of Tennessee – Democratic – Republican
State of Texas – Democratic – Republican
State of Utah – Democratic – Republican
State of Vermont – Democratic – Republican
Commonwealth of Virginia – Democratic – Republican
State of Washington – Democratic – Republican
State of West Virginia – Democratic – Republican
State of Wisconsin – Democratic – Republican
State of Wyoming – Democratic – Republican

Source:

- The electoral map widget is from InTrade .COM.

- InTrade .COM.

- All the charts below are also dynamic —they update themselves each time you open this webpage. – [The InTrade dynamic charts listed below go into feeds. ]

2008 US Presidential Election Winner – Individual

2008 US Presidential Election Winner – Political Party

2008 US Congressional Elections Winner – Political Party

2008 US Senate Control

2008 US House Of Representatives Control

BetFair

Winning Party

Next US President

- This is a dynamic compound chart, which updates itself each time you refresh this webpage. – [Feed readers: Download this webpage to visualize this BetFair widget, since it doesn't display within feed readers.]

Source:

- BetFair Politics Zone

- BetFair Chart Widgets – (They are based on Flash, a shitty technology that doesn’t go into feeds. )

Iowa Electronic Markets

2008 U.S. Presidential Election Winner-Take-All Market

2008 U.S. Presidential Election Vote Share Market

- Source: Iowa Electronic Markets

HubDub

2008 US Presidential Elections

- This is a dynamic electoral map, which updates itself each time you refresh this webpage. – [The HubDub dynamic charts listed below go into feeds. ]

- HubDub’s prediction markets on the 2008 electoral college:

- This is a dynamic compound chart, which updates itself each time you refresh this webpage. – [The HubDub dynamic chart listed below go into feeds. ]

Who will win the 2008 US Presidential Election?

2008 US Senate Elections

- This is a dynamic compound chart, which updates itself each time you refresh this webpage. – [The HubDub dynamic chart listed below go into feeds. ]

What will be the number of Democratic Seats in the Senate after the 08 Elections?

2008 US House Of Representatives Elections

- This is a dynamic compound chart, which updates itself each time you refresh this webpage. – [The HubDub dynamic chart listed below go into feeds. ]

What will be the number of Democratic Seats in House of Representatives after 08 Elections?

NewsFutures

Next US President Will Be Democratic.

Â© NewsFutures

Next US President Will Be Republican.

Â© NewsFutures

- NewsFutures and Bet2Give used to have chart widgets on the US primaries, which didn’t go into feed readers. We are waiting for their next chart widgets.

Resources on US Politics

- CNN – US Political Dashboard

- Yahoo! News – US Political Dashboard

- Real Clear Politics – Polls

- Electoral-Vote.com – Polls

- Five Thirty Eight – Polls

- Wikipedia – 2008 US Presidential Elections

- Wikipedia – 2008 US House Of Representatives Elections

- Wikipedia – 2008 US Senate Elections

- Wikipedia – 2008 US Gubernatorial Elections

UK Elections

BetFair

Next General Election – Most Seats

Next UK Prime Minister

InTrade

Winner of Next UK Election – Political Party

UK Conservatives

UK Labour

The Prediction Exchanges

- List of the main real-money and play-money prediction exchanges (betting exchanges) at Midas Oracle

- Complete list of the real-money and play-money prediction exchanges (betting exchanges) at Midas Oracle

- Complete list of the real-money and play-money prediction exchanges at CFM

2008 US Presidential and Congressional Elections Prediction: The Sarah Palin effect has partially evaporated, but its remains point to a close race, come Tuesday, November 4, 2008.

Chris F. Masse — Tue, 23 Sep 2008 19:47:14 +0000

#1. Explainer On Prediction Markets

A prediction market is a market for a contract that yields payments based on the outcome of a partially uncertain future event, such as an election. A contract pays $100 only if candidate X wins the election, and $0 otherwise. When the market price of an X contract is $60, the prediction market believes that candidate X has a 60% chance of winning the election. The price of this event derivative represents the imputed perceived likelihood of this partially uncertain event (i.e., its aggregated expected probability). A 60% probability means that, in a series of events each with a 60% probability, the favored outcome is expected to occur 60 times out of 100, and the unfavored outcome is expected to occur 40 times out of 100.

Each prediction exchange organizes its own set of real-money and/or play-money markets, using either a CDA or a MSR mechanism —with or without an automated market maker.

More Info:

- The Best Resources On Prediction Markets = The Best External Web Links + The Best Midas Oracle Posts

- Prediction Market Science

- The Midas Oracle Explainers On Prediction Markets

- All The Midas Oracle Explainers On Prediction Markets

#2. Objective Probabilistic Predictions = Charts Of Prediction Markets

Put your mouse on your selected chart, right-click, and open the link in another browser tab to get directed to the prediction market page of your favorite exchange.

2008 US Elections

InTrade

2008 US Electoral College

- This is a dynamic electoral map, which is up to date. Click on the image, and open the website (ElectoralMarkets.com) in another browser tab to get the bigger version.

- This is a dynamic electoral map, which is up to date. Feed readers: Download this webpage to visualize this InTrade widget.

Source:

- The electoral map widget is from InTrade .COM.

- InTrade .COM.

- All the charts below are also dynamic —they update themselves each time you open this webpage.

2008 US Presidential Election Winner – Individual

2008 US Presidential Election Winner – Political Party

2008 US Congressional Elections Winner – Political Party

2008 US Senate Control

2008 US House Of Representatives Control

BetFair

Winning Party

Next US President

Source: BetFair Politics Zone

Iowa Electronic Markets

2008 U.S. Presidential Election Vote Share Market

2008 U.S. Presidential Election Winner-Take-All Market

- Source: Iowa Electronic Markets

NewsFutures

Next US President Will Be Democratic.

Â© NewsFutures

Next US President Will Be Republican.

Â© NewsFutures

HubDub

- HubDub’s prediction markets on the 2008 electoral college

Resources on US Politics

- CNN – US Political Dashboard

- Yahoo! News – US Political Dashboard

- Real Clear Politics – Polls

- Electoral-Vote.com – Polls

- Five Thirty Eight – Polls

- Wikipedia – 2008 US Presidential Elections

- Wikipedia – 2008 US House Of Representatives Elections

- Wikipedia – 2008 US Senate Elections

- Wikipedia – 2008 US Gubernatorial Elections

Canadian Elections

InTrade

Winner of Next Canadian Federal Election – Political Party

Conservatives

Liberal

BetFair

2008 Federal Election

Most Seats

Overall Majority

UK Elections

BetFair

Next General Election – Most Seats

Next UK Prime Minister

InTrade

Winner of Next UK Election – Political Party

UK Conservatives

UK Labour

The Prediction Exchanges

- List of the main real-money and play-money prediction exchanges (betting exchanges) at Midas Oracle

- Complete list of the real-money and play-money prediction exchanges (betting exchanges) at Midas Oracle

- Complete list of the real-money and play-money prediction exchanges at CFM

Charts Of Expired Prediction Markets

- Charts Of Expired Prediction Markets

- Other Charts Of Expired Prediction Markets

A Democratic sweep in Washington DC, in November 2008, will likely lead to the legalization of the real-money prediction markets.

Chris F. Masse — Tue, 22 Jan 2008 17:07:44 +0000

Gambling 911:

With the Nevada Caucuses taking place this Saturday, The Las Vegas Sun reports that Democrat Hillary Clinton supports a study to determine if Internet gambling can be fairly regulated so that individuals can safely participate in it and American businesses can compete in the international market.

I was not able to find that article from The Las Vegas Sun. If you get your hand on it, send me its URL and I’ll update this post (and credit you). Thanks.

A Democratic sweep in November 2008 will be beneficial for InTrade-TradeSports and BetFair-TradeFair.

—

Excerpts from the Midas Oracle Dashboard (full of many dynamic charts of many prediction markets from many prediction exchanges )

—

2008 US Presidential Elections

2008 Democratic Nominee

2008 US Presidential Election Winner

2008 US Senate Control

2008 US House Of Representatives Control

—

BetFair

—

NewsFutures

Democratic Nominee

Hillary Clinton

—

Next US President Will Be Democratic.

Yahoo! Election 2008 Political Dashboard

David Pennock — Mon, 17 Dec 2007 19:27:22 +0000

(Cross posted from Oddhead Blog.)

I’m happy to report the launch of the Yahoo! Election ’08 Political Dashboard. Using the dashboard, you can navigate through a wealth of election-related data, including prediction market data from intrade.com, polling data from Real Clear Politics, search buzz data from Yahoo!, and financial contributions data, regional demographic data, and historical voting records from AP. You can view the election landscape from the national level or dive in deeper to investigate trends state by state.

Yiling, Tej, Lance, and I played supporting roles among a cast that includes fantastic teams at Yahoo! News, UI/Design, Ops, Q&A, and more.

We’ve come a long way since 2006.

See also coverage from TechCrunch and the Yahoo! corporate blog.

Previous: From Chris “Outrageous Spin” Masse.

DAVID PENNOCK’S YAHOO! ENDORSE IRELAND-BASED, ILLEGAL, REAL-MONEY PREDICTION MARKETS.

Chris F. Masse — Sat, 15 Dec 2007 13:57:06 +0000

UPDATE: Someone points to me that there is no hyperlink between Yahoo! News Dashboard and InTrade. Indeed.

My understanding was that she wasnâ€™t Treasury secretary in the Clinton administration, so I donâ€™t know exactly what experiences sheâ€™s claiming.

Chris F. Masse — Wed, 12 Dec 2007 18:29:15 +0000

Barak Obama on Hillary Clinton. Everybody laughed. New York Times columnist Maureen Dowd (in a November column) continues:

Hillary [Clinton] did not show good judgment in her areas of influence â€” the legal fiefdom, health care and running oppo-campaigns against Billâ€™s galpals.

â€œShe hasnâ€™t accomplished anything on her own since getting admitted to Yale Law,â€ wrote Joan Di Cola, a Boston lawyer, in a letter to The Wall Street Journal [*] this week, adding: â€œShe isnâ€™t Dianne Feinstein, who spent years as mayor of San Francisco before becoming a senator, or Nancy Pelosi, who became Madam Speaker on the strength of her political abilities. All Hillary is, is Mrs. Clinton. She became a partner at the Rose Law Firm because of that, senator of New York because of that, and (heaven help us) she could become president because of that.â€

[*] I couldn’t get the damn link.

Previously: Will Hillary Clinton win the 2008 US presidential elections?

Electability of Hillary Clinton according to InTrade-TradeSports = 65%

Chris F. Masse — Wed, 12 Dec 2007 15:11:35 +0000

Eddy Elfenbein at Crossing Wall Street:

I written about this topic before but one of the things I find fascinating about finance is how you can use markets for two items to create an â€œimplied marketâ€ for a third. This idea is at the root of all the complex financial instruments that caused problems for so many hedge funds recently.

Iâ€™ll give you a good example. At InTrade.com, the site where you can trade futures on real world events, you can buy contracts on which candidate will win his or her partyâ€™s nomination [*] next year. Thereâ€™s a separate contract for which candidate will win the presidency [**].

Let’s break out some math, shall we?

If you divide the latter [**] by the former [*], you get an â€œelectabilityâ€ contract. For example, according to recent prices, Rudy Giuliani has a 41.5% chance (I’m using the last price) of getting the GOP nomination and an 18.4% of winning the presidency. Soooo… the market believes that if he gets the nomination, he has a 44.34% chance of winning (18.4% [**] divided by 41.5% [*]).

(The only minor flaw is that could include a candidate winning but not getting the nomination, however, Iâ€™m content with dismissing that possibility as beyond remote.)

Whatâ€™s interesting is electability in the general election can have little impact on how well a candidate does in the primaries. Some people, myself included, think that Ronald Reagan would have had a better chance of beating Jimmy Carter in 1976 instead of Gerald Ford, even though Ford beat Reagan for the nomination.

I should add that I donâ€™t place a great deal of faith in these real world futures markets. I simply see them as fun games to enjoy, but not to take too seriously. Also, the markets arenâ€™t very liquid. A minor change could have a big impact on the smaller-priced contracts.

Having said that, hereâ€™s a look at some candidates and the marketâ€™s take on their electability (sorry Paulites and Edwards fan, your candidates were too low to get a useful meaure).

Candidateâ€¦â€¦â€¦To Get Nominationâ€¦.To Win…………Electability
Hillary……………………..59.5……………….39.0………………65.55
Obama……………………33.0……………….17.2………………52.12
Giuliani……………………41.5……………….18.4………………44.34
Huckabee………………..18.6…………………7.2………………38.71
Romney…………………..18.8…………………5.9………………31.38

Iowa Caucus: British blogger Mike Smithson is selling Hillary Clinton short.

Chris F. Masse — Fri, 07 Dec 2007 13:43:26 +0000

Mike Smithson in the Financial Times today:

[...] Feeding the development of political gambling is in his own interest. Mr Smithson estimates that there are as few as 1,500 regular political gamblers [*] in the UK, although the number swells to millions on the eve of an election. US constraints on online gambling have impeded the development of a political gambling market there. But Britons are just as happy to bet on US elections as their own. Mr Smithson says British wagers on the 2004 presidential election totalled Â£35m, against maybe Â£25m of bets on the UK Parliamentary election the following year [in 2005]. [...]

[About] the US race[.] â€œI am quite heavily committed at the moment,â€ says Mr Smithson. The market is moving fast as perceptions of candidates change rapidly in the run-up to the January 3 Iowa caucus. â€œI think Hillary Clinton is not going to do as well as people are expecting,â€ says Mr Smithson. â€œI am a Hillary seller at the moment.â€ Among Republican candidates, Mr Smithson is a bull of Mike Huckabee, an old-fashioned conservative from Arkansas. â€œI think he is going to do quite well in Iowa.â€

But is the political betting market any good at predicting real-life outcomes? â€œI think it is,â€ says Mr Smithson. But if you want to consistently profit from it, he says, you have to exit before the actual elections arrive.

[*] Political bettors and traders, I’d say.

Could a political campaign use prediction markets?

Adam Siegel — Mon, 26 Nov 2007 14:32:58 +0000

This is cross-posted from our Inkling Markets blog where we have far fewer readers than the illustrious Midas Oracle. …

—

There are several prediction marketplaces out there for the upcoming U.S. election season and probably more to come. All the ones we know of are intended for participation by the general public. But what if a Presidential campaign ran an internal marketplace? How could prediction markets be used to give a campaign a competitive advantage? We put our political operative hats on for a few minutes and came up with some scenarios:

Resource Allocations

Speaking to veterans of previous presidential campaigns, one of the biggest issues mentioned was building consensus internally on resource allocation across the primaries, then for the general election. Conflicting polling data and infighting among advisors often led to the abandonment of several states where post-mortem analysis of actual voting patterns showed the candidate would have had a chance. Using prediction markets as input to resource allocation decisions, questions could be asked that compare performance metrics across different states, i.e. levels of support among certain voter blocs, predicted endorsements, outcomes of local elections that could impact the general election, etc. This type of information is hard to gather through traditional polling mechanisms but could easily be captured across participants from individual states, locales, and the general campaign.

Fundraising Forecasts

We assume existing forecasting methods used by campaigns are fairly accurate at anticipating how much money will be raised on a quarterly basis from a defined donor list. What may not be as well defined, however, is the impact of various campaign maneuvers on donation levels. For example, a campaign could internally test various scenarios with national campaign staff, field workers, even undecided voters to see if certain activities drive increased fundraising. If the campaign goes through with the activity, the campaign could evaluate the market and pay it out. If not, the market could simply be refunded. Of course, a campaign could also use prediction markets as further input to official forecasts across the different fundraising channels, allowing a more diverse group of people who may have additional insight beyond the “MBA types” at campaign headquarters crunching numbers.

Risk Management

(Using Inkling,) questions in a prediction market could be generated by the national campaign and staff at the local level. This “web of questions” would be especially useful when trying to anticipate risks to the campaign. The prediction market could be a clearing house of the whispers, rumors, and self-perceived weaknesses of the campaign to continuously test their merit or impact on the campaign. For example, someone from the local staff may be aware of a negative perception the candidate suffers from in a particular voting district. They could run a prediction market about its impacts in an upcoming primary, i.e. “Will the candidate be perceived as weak on X in analysis of post-appearance local media coverage?” If the stock price remains low, that issue probably does not need to be dealt with specifically. If it’s high, it may be an issue the campaign chooses to address proactively ahead of the predicted negative coverage.

Policy Predictions

Given the interest shown to any major candidate, a prediction market gives a campaign an outlet for those supporters wishing to participate in a more meaningful way than simply donating money. A market geared towards public policy across a wide range of issues, both national and local, would be an excellent resource to send people to. Currently most candidate’s online presence is focused largely on networking, information dissemination, event notifications, and fundraising. A broadly available prediction market would allow people to provide input on what they think will happen from a policy perspective, i.e. will a particular bill pass? How much funding will an initiative receive, etc.? The campaign could then take these predictions as input to shape policy. A similar marketplace could also be set up with a more limited audience of dedicated national and local campaign staff. This marketplace could be augmented with policy experts from around the world to provide additional perspective.

Competitive Analysis

Intended for a tightly controlled group of trusted participants, prediction markets could be run on the performance of the other candidates related to their fundraising levels, endorsements, primary performance, etc. to see how one candidate compares to another. This information would be very useful for strategy formulation. Four years ago some of the candidates tapped the blogosphere to drive early campaign participation and fundraising success.

This year most candidates are trying to build up and leverage their online social networks a la Facebook. Will this campaign season also be the year we see a candidate tapping the collective wisdom of his/her sprawling campaign apparatus?