Journal article
Prediction market accuracy in the long run
International journal of forecasting, Vol.24(2), pp.285-300
04/01/2008
DOI: 10.1016/j.ijforecast.2008.03.007
Abstract
“Prediction markets” are designed specifically to forecast events such as elections. Though election prediction markets have been being conducted for almost twenty years, to date nearly all of the evidence on efficiency compares election eve forecasts with final pre-election polls and actual outcomes. Here, we present evidence that prediction markets outperform polls for longer horizons. We gather national polls for the 1988 through 2004 U.S. Presidential elections and ask whether either the poll or a contemporaneous Iowa Electronic Markets vote-share market prediction is closer to the eventual outcome for the two-major-party vote split. We compare market predictions to 964 polls over the five Presidential elections since 1988. The market is closer to the eventual outcome 74% of the time. Further, the market significantly outperforms the polls in every election when forecasting more than 100 days in advance.
Details
- Title: Subtitle
- Prediction market accuracy in the long run
- Creators
- Joyce E. Berg - University of IowaForrest D. Nelson - University of IowaThomas A. Rietz - University of Iowa
- Resource Type
- Journal article
- Publication Details
- International journal of forecasting, Vol.24(2), pp.285-300
- Publisher
- Elsevier B.V
- DOI
- 10.1016/j.ijforecast.2008.03.007
- ISSN
- 0169-2070
- eISSN
- 1872-8200
- Language
- English
- Date published
- 04/01/2008
- Academic Unit
- Finance; Economics; Accounting
- Record Identifier
- 9984380541502771
Metrics
3 Record Views