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Aggregate earnings and market expectations in United States presidential election prediction markets

Taylor Wiesen

Advances in accounting, 2023, vol. 60, issue C

Abstract: This study uses election futures market data to provide the first empirical evidence that aggregate earnings conveys timely “election-relevant” information effecting betting market participants' expectations about the likely outcomes of United States presidential election campaigns. I document that aggregate earnings news is associated with multiple facets of U.S. economic health affecting voter utility. I then use high-frequency data from the Iowa Electronic Political Prediction Market (IEM) to document that aggregate earnings news, including cash flow news, is significantly related to changes in the expected outcomes of U.S. presidential elections and incremental of other measures of economic health.

Keywords: Aggregate earnings; Expected earnings; Decision relevance; United States presidential elections; Political prediction markets (search for similar items in EconPapers)
JEL-codes: D72 M41 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:advacc:v:60:y:2023:i:c:s088261102200058x

DOI: 10.1016/j.adiac.2022.100639

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