Iowa Electronic Markets Cited

Business students from the Massachusetts Institute of Technology participating in a mock stock exchange at a vacation lodge here last month received instant feedback. The idea was inspired by the successes of several Internet-based trading exchanges that have been called "decision markets" by Robin Hanson, an economics professor at George Mason University. The most renowned one, THE IOWA ELECTRONIC MARKETS, has often outperformed pollsters in predicting election results. The market, operated by the HENRY B. TIPPIE COLLEGE OF BUSINESS AT THE UNIVERSITY OF IOWA, permits investors to buy and sell shares in a candidate, based either on how much of the vote they expect the candidate to receive or simply on whether the candidate will win or lose. Participants can invest up to $500 under a special clearance from the Securities and Exchange Commission that protects the market from being charged with illegal sponsorship of gambling.