KDnuggets : News : 2006 : n21 : item3 < PREVIOUS | NEXT >


Subject: Computer scientists track prediction markets in run-up to U.S. elections

As voters prepare for the polls Nov. 7, computer scientists at the University of Chicago and Yahoo! Research are calling attention to the uncanny track record that an Irish securities trading market has for accurately predicting the outcome of U.S. elections.

The computer scientists have devised websites that display continuously updated color maps predicting the outcome of the 2006 gubernatorial and senate races. The predictions are linked to the prices of securities at Tradesports.com, an Irish trading site that runs a market for each state with a gubernatorial or senate race.

“The prices of the securities have in the past shown to be a surprisingly accurate prediction of future events,” said Lance Fortnow, Professor in Computer Science at the University of Chicago. “In 2004, these markets correctly predicted all but one of the senate races and every state correctly in the electoral college. We put the map together to highlight the importance of these markets and let people get a quick view of what the markets say.”

The maps, a joint project of Fortnow and David Pennock and Yiling Chen of Yahoo! Research, may be viewed at http://www.fortnow.com/governor/ and http://www.fortnow.com/senate/. Solid red states are those that are heavily favored to go Republican, according to Tradesports data, while solid blue states are likely to go Democratic. States of lighter shades indicate more tightly contested races.

As of Nov 4, predicted probabilities on http://www.fortnow.com/senate/ were

GOP Senate Control - 70% (with 51 seats)

GOP House Control - 21%.

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KDnuggets : News : 2006 : n21 : item3 < PREVIOUS | NEXT >

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