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Experimental Political Betting Markets and the 2004 Election

Justin Wolfers () and Eric Zitzewitz ()

The Economists' Voice, 2004, vol. 1, issue 2, 1-8

Abstract: Betting on elections has been of interest to economists and political scientists for some time. We recently persuaded TradeSports to run experimental contingent betting markets, in which one bets on whether President Bush will be re-elected, conditional on other specified events occurring. Early results suggest that market participants strongly believe that Osama bin Ladens capture would have a substantial effect on President Bushs electoral fortunes, and interestingly that the chance of his capture peaks just before the election. More generally, these markets suggest that issues outside the campaign - like the state of the economy, and progress on the war on terror - are the key factors in the forthcoming election.

Date: 2004
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The Economists' Voice is currently edited by Michael Cragg, Dwight Jaffee and Joseph Stiglitz

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