IEM Cited in Election Market Story

A story about websites that let people speculate on world events by imitating the futures and options trading pits says they are most accurate when the players have a stake in the question at hand and the result is determined by a large number of people. The IOWA ELECTRONIC MARKETS, for instance, collect small bets made with real money on the outcome of elections. They report that the prices of futures contracts pegged to the results of elections are often better predictors than most polls. (Data from the Iowa markets, run by the faculty of the UNIVERSITY OF IOWA's business school, are used to study trading behavior and as a teaching tool to introduce students to real-world markets.)