Tomorrow, I will teach my class about prediction markets. With the presidential election just over a month away, below is my best estimate for how the election will go. This is based 100% off of today's trading on Intrade.
To be clear, I am not only forecasting that Obama will be the winner, but that he will receive 332 electoral votes vs. 206 for Romney.
Prediction markets did a phenomenal job forecasting the election in 2004 and 2008, and I have every confidence they will do well this year too.
To be honest, between teaching, keeping up with other responsibilities at Marymount, and trying to finish up my dissertation, I haven't been keeping up with the election news. But as I will teach my class tomorrow, prices do such a great job economizing on information that I don't have to.
For more on prediction markets:
- See my previous posts on prediction markets.
- Read A Market Approach to Politics -- a nice New York Times article by Hal Varian
- Read The Wisdom of Crowds by James Surowiecki for a great, intuitive introduction to why prediction markets work.
- Visit the Iowa Electronic Markets, a political prediction market run by the University of Iowa. More on them here.