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Dyslexia, a learning disability that hinders reading, hasn't been associated with deficits in vision, hearing, or...
Exotic, elusive, and dangerous, snakes have fascinated humankind for millennia. They can be hard to find, yet their...
Researchers have sequenced and analyzed the first two snake genomes, which represent two evolutionary extremes. The...
Snake venoms are remarkably complex mixtures that can stun or kill prey within minutes. But more and more researchers...
At age 30, Dutch biologist Freek Vonk has built up a respectable career as a snake scientist. But in his home country,...
Since arriving on the island of Guam in the 1940s, the brown tree snake ( Boiga irregularis ) has extirpated native...
An animal rights group known as the Nonhuman Rights Project filed lawsuits in three New York courts this week in an...
Researchers have been hot on the trail of the elusive Denisovans, a type of ancient human known only by their DNA and...
- 5 December 2013 11:26 am , Vol. 342 , #6163
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Betting on the President
27 July 2004 (All day)
A century ago, betting on the presidential election was a popular quadrennial pastime. Now, thanks to the Internet, so-called "prediction markets" are booming again--and drawing serious attention from economists.
Two articles published this month in the Journal of Economic Perspectives suggest that betting markets can out-forecast the polls. In one, Paul Rhode and Koleman Strumpf of the University of North Carolina, Chapel Hill, relate that from 1884 to 1940, when election wagering was wildly popular, the betting favorite won in every year but 1916, when Woodrow Wilson beat Charles Evans Hughes with a last-minute upset in California. After 1940, because polls were perceived as more scientific, the gambling markets faded from public consciousness, says Strumpf.
But the current betting markets--led by Web sites such as www.intrade.com, tradesports.com, and fairbet.com--may outperform opinion polls. In the last four presidential elections, according to a paper by Justin Wolfers of the University of Pennsylvania and Eric Zitzewitz of Stanford University, the University of Iowa's Iowa Electronic Market has averaged an error margin of ±1.5% in the week before the vote, compared with ±2.1% for the Gallup polls. More recently, traders picked John Edwards as John Kerry's running mate 2 months before Kerry did.
It might seem as if markets would be more accurate than polls because they involve more people, but according to Wolfers and Strumpf that is not the real reason. "Polls simply reflect voters' beliefs that day," Strumpf says. "Markets think of things that might change people's opinions months from now." Thus, for example, candidates always get a surge in popularity in the polls after a convention, but canny bettors know it won't last.
The Iowa Electronic Markets