IEM Lets Investors Wager in Presidential Elections

A story about futures markets notes that a number of Internet sites have already cropped up allowing the general public to speculate in these "prediction markets." Among them is the Iowa Electronic Markets, operated by the UNIVERSITY OF IOWA business school, have let players wager up to $500 on the outcome of every presidential election since 1988. Spurred by the profit motive, people bring to markets everything they know, and place their bets accordingly. That means markets, with all their chaotic buying and selling and hedging and speculation, are really very efficient mechanisms to bring together information. And all that information is revealed in one simple number -- the price. The Tribune is published in California.

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