An options-pricing approach to forecasting the French presidential election

John Fry, Thomas Hastings and Jane Binner

Journal of the Operational Research Society, 2025, vol. 76, issue 1, 167-179

Abstract: A subjective probability argument suggests vote-share estimates from polling companies can be interpreted as market prices. The corresponding election constitutes the price at a known future date. This makes an options-pricing approach particularly attractive. In this setting, vote-share estimates, the probability of winning the popular vote and the second-round qualification probability all have a convenient representation in terms of binary options prices. In this article, we develop options-pricing, vote-transfer, and Monte Carlo methods to forecast the French presidential election. The approach fits well with the proportional and regimented two-stage nature of the French election but applies more broadly. Unusually for a French system characterised by uncertainty and constant flux the incumbent President Macron appears in a dominant position throughout the 2017 and 2022 elections albeit with no chance of an outright win in the first round.

Date: 2025
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DOI: 10.1080/01605682.2024.2334339

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