The idea behind political prediction markets is simple. Lots of people wager on the outcome of political campaigns: Who's going to be the Democratic presidential nominee? Will the Republicans take back the House? And when the votes are counted, the winning bettors collect. The thrill of prediction markets for political junkies is that they harness "the wisdom of crowds." A single person's bet on an election outcome isn't very good, but thousands of bets, with real stakes, are more likely to predict the correct result than even the best pundit. The Iowa Electronic Markets, the big daddy of the political prediction markets, is consistently better at forecasting winners than pre-election polls.
Wednesday, January 23, 2008
"Why Vote When You can Bet"
Slate offers a guide to The Political Markets. Here is an explanation:
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2 comments:
Interesting... but anything has to be better than the polling we've seen lately, especially in NH.
It is an interesting rhetorical device to create the argument of the inevitable.
It is similar to the argument of quality through quantity: what is popular must be the best. Yet, there are many assumptions underneath this may may not be correct.
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