Saturday, October 13, 2007

Why Vote When You Can Bet?

Slate's guide to all the political markets.

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. (Read a 2003 Slate "Explainer" about prediction markets here.)

If a single prediction market is wiser than the pundits and the polls, imagine how wise all the prediction markets are together. That's the idea behind Slate's "Political Futures," which offers a comprehensive guide to all the big political prediction markets.

From now until Election Day 2008, we'll publish regular updates of the key data from Iowa Electronic Markets,,, and (Casualobserver has not yet launched its 2008 political prediction market, but we will add it as soon as it goes up.)...MORE