Nominatibility and Electability – 2008 presidential prediction markets

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Via our usual suspect Mike Linksvayer (recently featured in the New York Times for his weird diet), David Schneider-Joseph (a Foresight Exchange fanboy) on how to measure real electability of the US presidential candidates. Go reading his reasoning. His conclusion:

Put this way, it&#8217-s not a surprise that candidates with greater party ties have a greater chance of being nominated than their electability deserves. But that&#8217-s not the same thing as saying that their electability is actually lower than that of their competition.

BetFair: Which of these parties will have more seats in the US Senate following the 2006 US Senate Elections?

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Republicans: 49%

Democrats: 53.8%

Ex-BBC News Mike Smithson (of the Political Betting blog) wonders whether BetFair will count the two Independent U.S. Senators (Liberman and Sanders) in the Democratic camp.

Lieberman won re-election as the “Connecticut For Lieberman” party candidate – an independent political party he created after losing the 2006 Democratic primary election to Ned Lamont. He has said he will sit as part of the Democratic Senate caucus in the upcoming 110th Congress.

Sanders won yesterday in Vermont as an independent but will caucus with the Democrats and it is said will be counted as a Democrat for the purposes of committee assignments.

The problem that Betfair will have to resolve is that neither ran as a Democrat although they will be attached to the Democrats in the Upper House.

To add to the complication Nick Palmer, MP, posted this on the previous thread at 1.34pm – “I have it in writing from Betfair that they will count the two independents as Democrats. (I asked them a month or two ago before I put a tenner on.) If you have opposite advice in writing, they should be embarrassed!”.

Addendum: From one commenter&#8230-

The question was “Which of these parties will have more seats in the US Senate following the 2006 US Senate Elections?”

The options were Republicans and Democrats. The result is 49-49 with two independents.

It’s a draw- I can’t see how anyone can see otherwise.

Addendum 2: From Yahoo! News (whose data are provided by the Associated Press)&#8230-

Liberman (CT) and Sanders (VT) are counted as Democrats.

Addendum 3: From the Washington Post frontpage&#8230-

Editor&#8217-s Note: Independent members of Congress typically caucus with the Democrats.

Addendum 4: From the New York Times&#8230-

Full Senate Results &#8212- Republican: 49 &#8212- Democratic: 50 – Includes independents who align with the Democratic caucus. &#8212- [CFM’s NOTE: Virginia is still in play at the time of writing.]

Addendum 5: Mike Smithson&#8230-

So punters who are tempted into this market are risking money on how they think Betfair will settle the market.

Faulty polls screw up the political prediction markets. – REDUX – The no polls case, now.

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Two days ago, I stated brashly that political prediction markets aggregate the polls, mainly. (Mike Linksvayer nuanced my propos, in the comment area.)

GOP Keeps Senate, Loses House, Betting Site Says. – [US political prediction markets] – by Ronald Kessler – 2006-10-24

One theory is that prediction markets are influenced by the results of opinion polls. But if that were true, individual polls would also influence each other. Moreover, long before the Internet and opinion polls came into existence, election betting was accurately predicting election outcomes. From 1884 to 1940, betting was conducted on Wall Street by specialized brokers called betting commissioners. The betting odds for each candidate were published daily in the New York Times and other papers. The so-called New York betting markets correctly predicted 12 of the 13 presidential elections between 1884 and 1940, according to Koleman S. Strumpf, Koch professor of economics, University of Kansas School of Business, who co-authored a paper examining the markets. In the one exception, the betting swung to even odds by the time the polls closed. The Gallup Poll, the first scientific opinion poll, began in 1935. The arrival of opinion polls and stricter anti-gambling laws drove out the New York betting markets. The Internet has led to their revival.

Paper: Historical Prediction Markets: Wagering on Presidential Elections – (PDF) – by Paul W. Rhode and Koleman S. Strumpf – 2003-11-10

My Question: Before 1935 (that&#8217-s when George Gallup crafted the first scientific polls), what the hell those political prediction markets were aggregating, for Christ&#8217-s sake??? And where is our good doctor Koleman Strumpf when we need him?

Previous blog posts by Chris F. Masse:

  • Become “friend” with me on Google E-Mail so as to share feed items with me within Google Reader.
  • Nigel Eccles’ flawed “vision” about HubDub shows that he hasn’t any.
  • How does InTrade deal with insider trading?
  • Modern Life
  • “The Beacon” is an excellent blog published by The Independent Institute.
  • The John Edwards Non-Affair… is making Memeorandum (twice), again.
  • Prediction Markets = marketplaces for information trading… and for separating the wheat from the chaff.