Tuesday, October 19, 2004

The Presidential Futures Market: An entertaining alternative to watching Presidential polls The University of Iowa Tippie Business School brings you the Presidential Winners-Takes-All futures market. The Presidential Futures market predicts the outcome of Presidential elections more accurately than polls. For Example: fromThe Foundation for Teaching Economics On the Iowa Electronic Market (IEM), futures contracts pay $1 if a defined outcome occurs - like the winning of a Presidential election. For example, on September 6, 2004, you could buy a George Bush contract in the IEM for 55¢ and a John Kerry contract for 45¢. (Notice that the sum of the contract prices will always be close to $1 since the probability of either Kerry or Bush winning is, realistically, 100%. Sorry, Ralph.) People who bought Bush contracts on September 6th believed that George Bush had a greater than 55% probability of winning. Those who bought Kerry contracts believed the likelihood of John Kerry winning exceeded 45%. As people buy and sell contracts, the prices respond to the changes in supply and demand. If market participants believe that Kerry's chance of winning is improving, they will sell Bush and buy Kerry. This will cause the price of Bush to fall and the price of Kerry to rise, reflecting the change in expectations. Ever so much more fun to check the Presidential Futures market hourly than to listen to the media pundits. Iowa Electronic Markets 2004 US Presidential Election Winner Takes All Market Kerry versus Bush Aggregate Probabilities* Produced by: Iowa Electronic Markets, University of Iowa Tippie College of Business *Contracts were split on September 21 2004. This graph shows the sum of the two Republican contract prices (that sum represents the probability that Bush will receive the most popular vote) and the sum of the two Democrat contract prices (that sum represents the probability that Kerry will receive the most popular vote). comment []10:32:02 PM

Daughter L and I had a very nice time the other evening at Daughter's for a family celebration of her birthday. Ski Boy fixed marvelous ribs on the BBQ. SB and Daughter and this year's pumpkin gift for her October birthday. comment []12:56:01 PM

I've been MFB (Missing from Blogging) because I've been earning these? I found these at Skinny Raven when shopping for Daughter's B-Day gift. I decided if I could get my checking account brought up to Real-Time so I could use my debit card rather than my credit card, I would have earned these very nifty clogs. I had been working (only slightly) toward this goal since February---with very little progress. It has necessitated changing my book keeping process. These clogs were the incentive I needed. I've worked very hard the last ten days and now everything is up to date. I'm banking in Real Time and proudly wearing my "Kitty Clogs." comment []12:44:10 PM

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