Computer File

Consistency in the US Congressional popular opinion polls and prediction markets

Prediction and betting markets have evolved with contracts based on electoral
outcomes and the traded prices provide a measure of speculators’ views on electoral
outcomes. Conversely, popular opinion polls yield data which provide statistics on the
public’s declared voting intentions. This article formulates a model to describe the
stochastic evolution of opinion polls, and the resultant probability distribution of seats
won in the US House of Congress. Based on standard methods from financial option
pricing theory, we can then determine the theoretical value of observed contracts in
the prediction markets. Our results show that qualitative predictions are obeyed, but
there exist significant deviations between the actual prices traded in the Iowa
Electronic Market (IEM) and our theoretical valuation under real-world expectations.
Some explanations are provided, which are consistent with conclusions drawn by
other authors who have studied electoral prediction markets.

Ketersediaan

Informasi Detail

Judul Seri

THE JOURNAL OF PREDICTION MARKETS; Vol.4 No.2 2009

No. Panggil

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Penerbit

United Kingdom : University of Buckingham Press., 2009

Deskripsi Fisik

p. 45-64

Bahasa

English

ISBN/ISSN

1750-676X

Klasifikasi

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Tipe Isi

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Tipe Media

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Tipe Pembawa

-

Edisi

-

Subjek

-

Info Detail Spesifik

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Pernyataan Tanggungjawab

Elliot Tonkes, Dharma Lesmono

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