Betting market
Iowa Electronic Markets
- run by the University of Iowa since 1988
- Experimental, small scale
- Real-money but limited investment
- Few participants, low liquidity
Forecasting the U.S. presidential popular vote
The Iowa Electronic Markets run two types of markets to predict the popular vote results in U.S. presidential elections. The Vote Share Market predicts the candidates‘ final vote shares, while the Winner-Takes-All Market predicts who will likely win the majority of votes.
Vote shares
In the U.S. Presidential Vote Share Market, participants predict and wager on the percentage of votes each candidate will receive. Each candidate has a corresponding contract that pays out a dollar for every percentage point of the total votes they secure in the 2024 U.S. Presidential election. This mechanism ensures that the contract prices directly mirror the anticipated vote shares for each candidate. Subsequently, these normalized percentages, totaling 100, enter the PollyVote’s betting markets component.
Vote winner
In the U.S. Presidential Winner-Takes-All Market, participants place bets on the party whose candidate they believe will secure the most votes in the election. Each candidate has an associated contract that pays out $1 if that candidate wins the majority of votes and $0 if the opponent garners more votes. Consequently, the prices of these contracts directly indicate the perceived likelihood of each candidate winning the majority of votes.