Elections and Prediction Markets
PredictWise provides and updates the results from three of the major prediction markets for the Presidential race. They show Intrade and Betfair - which base their trades on Electoral College victory. They also show the Iowa markets (IEM), which predicts the national population results - which are important for maintaining legitimacy. It stinks when you get an Electoral College victory, but the national popular vote goes the other way - as it did when Gore conceded to Bush (notice I did not say Bush defeated Gore - but there is no need to re-litigate that fiasco).
The predictive value of the prediction markets is really, really good. When people have to put money on a winner it is different than just giving an opinion. That said, Nate Silver gave a great discussion of the value of his statistics. Clearly his statistical analysis shows a clear Obama re-election. However, as he points out that does not mean Obama will win. He discussed what it meant for his model to show a 79 percent chance of an Obama re-election in terms of a football game. When there are 3 minutes left in a game and a team is up by 3 points, there is a 79 percent chance that the team that is aheas will win. Certainly there are teams that are able to come back and win (21 percent of the time it happens). Thus, Romney still has a shot, but the every day the odds are becoming longer and longer.
We will see an Obama re-election, just as I have been saying for months. Today's solid job numbers locked it up for the President. That is why the prediction markets are so heavily tilted toward a second term for President Obama.
posted by Rob @ 11/02/2012 03:41:00 PM
4 comments
4 Comments:
Professor, we'll see what happens tomorrow. To be honest though you haven't been too accurate in your predictions and analyses the past few years. Here's a sampling:
The Bears are a championship caliber team"- They haven't been able to consistently beat the Packers or other top teams.
"The economy is turning around".- The economy has hit bottom...and stayed there.
"The Republicans will get thrashed in the 2010 elections."--It didn't quite turn out that way!
"Predident Obama has done a great job in responding to the Hurricane Sandy disaster." -I'd like to see you try to convince residents of Staten Island and the Rockaways of that.
"Our relations with Israel have never been better than under President Obama."- I'd like to see you try to convince Israelis of that.
Dennis
"A 1/32 Cherokee Tea Party guy having fun"
"We’re going to have that person arrested and prosecuted that did the video."- Hillary Clinton to murdered Navy Seal Tyrone Woods' father.
I am quite certain that you can find many more examples where I have been right.
Even in the examples you have offered, the Bears are 7-1. They hosted the NFC Championship game 2 years ago. They were in the Super Bowl 5 years ago. I'm not sure why you don't think they are a championship caliber team.
The economy is not at a "bottom." No objective analyst would say that. It is dramatically improved from where it was when President Obama took office (800,000 jobs lost/month to 150,000 jobs gained/month; the Dow has doubled from its low; real estate is recovering; GDP was cratering and falling by nearly 6 percent per year to growth of about 2 percent, etc.)
We just have to disagree on Israel and the Hurricane Sandy response - you just have a difference of opinion.
I was correct on gold prices, job recovery, the Constitionality of Obamacare, and plenty of other things.
On the eve of the 2008 election I predicted a 360-178 Electoral College victory for Obama. It ended up 365-173 (I was wrong on Nevada).
It is easy to criticize. Let me know what your prediction is for tomorrow. I've put my prediction up already.
"Even in the examples you have offered, the Bears are 7-1. They hosted the NFC Championship game 2 years ago. They were in the Super Bowl 5 years ago. I'm not sure why you don't think they are a championship caliber team."
Relax professor, I was just pulling your chain.
"I was correct on gold prices, job recovery, the Constitionality of Obamacare, and plenty of other things."
You may have been correct on gold, but not on job recovery (14.5% real unemployment) and Obamacare ( the Supreme Court was wrong). Even a broken clock is right twice/day.
"Let me know what your prediction is for tomorrow."
A 269-269 Electoral College tie, with the House electing Romney the winner.
Dennis
"A 1/32 Cherokee Tea Party guy having fun"
We'll know tonight who is closer on the EC prediction. I'm looking forward to watching the coverage tonight. I just hope it isn't too late a night.
Should be fun.
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