The 2020 (Re)Election According to the Iowa Electronic Markets: Politics, Pandemic, Recession, and/or Protests?

Published on Jan 1, 2021in PS Political Science & Politics
· DOI :10.1017/S1049096520001419
Thomas S. Gruca3
Estimated H-index: 3
(UI: University of Iowa),
Thomas S. Gruca1
Estimated H-index: 1
+ -1 AuthorsThomas A. Rietz21
Estimated H-index: 21
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Abstract
References5
Newest
#1Joyce E. Berg (UI: University of Iowa)H-Index: 16
#2Christopher E. Penney (UI: University of Iowa)H-Index: 1
Last. Thomas A. Rietz (UI: University of Iowa)H-Index: 21
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Using the Iowa Electronic Markets (IEM), this article assesses the political impact of several important events during the fall of 2013: the US government shutdown, the Senate elimination of filibusters for presidential nominations (i.e., the “nuclear option”), and the implementation of the Patient Protection and Affordable Care Act (i.e., ObamaCare). Did these events have meaningful effects on congressional control prospects in the 2014 election? According to IEM price changes, Republican chanc...
1 CitationsSource
#1Joyce E. Berg (UI: University of Iowa)H-Index: 16
#2John Geweke (UTS: University of Technology, Sydney)H-Index: 68
Last. Thomas A. Rietz (UI: University of Iowa)H-Index: 21
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Prediction markets for future events are increasingly common and they often trade several contracts for the same event. This paper considers the distribution of a normative risk-neutral trader who, given any portfolio of contracts traded on the event, would choose not to reallocate that portfolio of contracts even if transactions costs were zero. Because common parametric distributions can conflict with observed prediction market prices, the distribution is given a nonparametric representation t...
6 CitationsSource
#1Robert S. Erikson (Columbia University)H-Index: 52
#2Christopher Wlezien (University of Texas at Austin)H-Index: 47
Election markets have been praised for their ability to forecast election outcomes, and to forecast better than trial-heat polls. This paper challenges that optimistic assessment of election markets, based on an analysis of Iowa Electronic Market (IEM) data from presidential elections between 1988 and 2004. We argue that it is inappropriate to naively compare market forecasts of an election outcome with exact poll results on the day prices are recorded, that is, market prices reflect forecasts o...
111 CitationsSource
#1Joyce E. Berg (UI: University of Iowa)H-Index: 16
#2Forrest D. Nelson (UI: University of Iowa)H-Index: 20
Last. Thomas A. Rietz (UI: University of Iowa)H-Index: 21
view all 3 authors...
"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 pol...
229 CitationsSource
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