October 28, 2004 | MarketplaceTrading and politics are Tom Skinner's two passions. He gets to merge them in the Iowa Electronic Markets. The business school at the University of Iowa runs futures markets to look into how well they predict election outcomes. "I've made a small number of well-timed trades that have really paid off quite handsomely," Skinner said. "The reason for doing this is not in terms of dollars per hour but really as much, you know, sort of personal satisfaction, you know, pitting your wits against other people who have different views and coming out on top." That contest of opinions ultimately creates a market price that reflects a sort of aggregate prediction of what's going to happen, according to Iowa business Professor TOM RIETZ. "Our traders are trying to forecast what the entire population will do in order to maximize profits, not just look at how they're feeling about the election," Rietz said. The Iowa markets have been forecasting state and national elections since 1988. The Marketplace program is broadcast on several public radio stations across the U.S.
Contact: Tom Rietz