Market Prices as Indicators of Political Events Evidence from the Experimental Market on the Czech Republic Parliamentary Election in 2002

Tomas Cahlik (cahlik@fsv.cuni.cz), Adam Gersl, Michal Hlaváček and Michael Berlemann (michael.berlemann@hsu-hh.de)

No 77, Working Papers IES from Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies

Abstract: According to efficient markets theory, the stock price on a competitive market is the best estimate of the stock’s present value. This is the basic assumption for predictions using experimental markets. The first part of the paper describes the features of such an experimental market, discusses shortly its advantages in providing predictions as compared to traditional opinion polls and identifies some assumptions that can influence its efficiency and predictive accuracy. The second part of the paper is then devoted to the results of the first experimental market organized in the Czech Republic, the political stock market on the Czech parliamentary elections into the Chamber of Deputies in June 2002.

Keywords: Experimental economics; political stock markets; predictions (search for similar items in EconPapers)
JEL-codes: C90 D80 G14 (search for similar items in EconPapers)
Pages: 20 pages
Date: 2005, Revised 2005
New Economics Papers: this item is included in nep-pol
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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