Archive for the ‘US elections 2008’ tag
Manipulating perception
Intrade.com is a website where punters can buy ’shares’ on political outcomes. On the site, you can buy ’shares’ which gives you a dollar if say, Obama wins the presidency, and nothing otherwise. Before the event, the shares trade at prices between zero and one, giving the market’s perception of the probability that the outcome will actually occur. Justin Wolfers points out that the market was able to accurately call the 2004 Bush-Kerry Presidential elections, along with the Electoral College votes by state and also the 2006 Senate race.
An event that has been buzzing about economics related blogs is the news that an investor has been trying to manipulate John McCain’s share price. It hasn’t achieved very much - more rational investors quickly drove the price back down - but it surely Intrade’s coming of age if somebody finds it worthwhile to spend real money to manipulate the political betting market.
(Incidentally, the founder of Intrade.com lives in Ireland - online gambling is illegal in the US.)
