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Polls versus Prediction Markets – Lance Fortnow Edition
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Prices as Probabilities in Election Markets – 2007 presentation by Lance Fortnow
Discussion continues here…-.
UPDATE: Follow up here.
The question that might well embarass David Pennock and Lance Fortnow
What is the usefulness of http://electoralmarkets.com/ as compared to the usefulness of http://www.electoral-vote.com/ ??
Answer attempts here.
NEXT: Polls versus Prediction Markets —- Lance Fortnow Edition
New Yahoo! News election dashboard
Cross-posted on Oddhead Blog.
The Yahoo! News Political Dashboard has re-launched for the general election stretch run of the 2008 US Presidential election.
From the main map you can see the status of the election in every state according to either polls or Intrade prediction market odds. Hover your mouse over a state to see current numbers or click on a state to see historical trends. On the side, you can see search trends, blogs, news, and demographic breakdowns at national and state levels.
You can also “-create your own scenario”- by picking who will win in every state. You can save and share your prediction and compare against markets, polls, history, or celebrities. More on ycorpblog.
Readers will be happy to see more thorough and prominent integration of prediction market prices compared to the primary election dashboard. Is that good enough to quiet Chris’-s whining?
In the PM view, states are colored either bright red or bright blue, regardless of how close the race is in that state. To see a visualization that blends colors to reflect the tightness of the race, see electoralmarkets.com.
Yahoo! News also offers a candidate badge that you can display on your blog declaring your choice. The badge features national-level polls, prediction markets, search buzz, and money raised.
One Wall Street / Chicago fanboy hopes that political prediction markets will soon be proposed by the established derivative exchanges, who work more professionally than InTrade (in his view).
State Polls versus Electoral College Prediction Markets
Prediction market analyst Lance Fortnow in an e-mail to me:
Right now the electoral college markets are tracking the polls pretty closely. I think we’-ll see some divergence when we get close to the election since the polls can’-t keep up. In past elections the markets were much better than the polls within a few days before the election (though not on election day itself which has too many rumors).
Other thoughts:
– There is a long-shot bias —-states which are above 85% (for one candidate or the other) reflect a probability closer to 100%.
– The state markets are strongly correlated. There is a small but non-trivial chance that many states will be way off this year. And then people will be reluctant to trust the electoral college markets in the future.
So, I have (at least) one answer to my series of provocative questions: Electoral college prediction markets are more useful than the state polls towards the very end of the presidential campaign (but not on Election Day). Interesting. Thanks.
PS: The discussion about this post goes on in the comment area of another post.
Prediction Markets for the 2008 Electoral College = US Electoral Map
Interesting blog post from Lance Fortnow on the VP prediction markets. (I will soon blog about those.)
InTrade – Electoral Markets Map
Their brand-new widget:
An event derivative trader compares the trading costs of BetFair, InTrade, TradeSports and MatchBook.
Wikipedia, InTrade, Justin Wolfers, McKinsey, NewsFutures, Google, CFM, Inkling, and IEM, top the Google Web Search results for the prediction markets query.
How the prediction markets query has been googled, in the last 12 months
