Prediction Markets vs. Political Pundits – 2006 US Senate (GOP control + individual races)

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&#8230- More exactly TradeSports-InTrade and Iowa Electronic Markets VERSUS The McLaughlin Group (PBS).

Reason Magazine writes:

Weirdly, the McLaughlin Group, the fustiest of all the talking head shows, had one of the best records this cycle, with Eleanor Clift, Lawrence O&#8217-Donnell, and John McLaughlin all predicting Democratic takeover of the Senate and calling nearly all of the close races correctly. Still, that old line about stopped clocks comes to mind.

Reality Check:

Vo, vo, vo. Not so fast. The McLaughlin Group is made up of five members. Three of them predicted the Dems in the US Senate, and so (if I&#8217-m correct) the associated probability was 3/5 = 60%. It does not strike me as an unanimous consensus.

As for TradeSports, Professor Lance Fortnow wrote that all (NOT: &#8220-nearly all&#8221-) individual 2006 US Senate races were predicted correctly.

More Links:

– The McLaughlin Group (PBS + CNBC Europe)

– 2006-11-03: Transcript – Audio (MP3) – Video (MP4) –

Parting Shot:

If the small-L and capital-L libertarians at Reason Magazine sides with the leftist bloggers and media in the anti-PM backlash, and if some from-day-one prediction market supporter goes amock, then the logical conclusion is: The Prediction Markets Have NOT Arrived Yet.


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Hello Professor Tyler Cowen and all the commenters,

#1. Professor Lance Fortnow made a specific point: taken one day before Election Day, the TradeSports&#8217-s prediction markets of the individual races for the US Senate were accurate (provided that Virginia and Montana go democratic).

#2. Professor Lance Fortnow DID NOT SAY that the TradeSports&#8217-s prediction market for the control of the US Senate was accurate. Please, don&#8217-t put words in his mouth.

#3. Analysis reports from economists and statisticians are coming, but, please give them time to digest the data&#8230- once the dust has settled.

Thanks for your attention,

Chris Masse