UI Futures Market Noted

A number of Internet gambling sites are taking bets on who will come out of the upcoming cardinals' conclave as the new leader of the Roman Catholic Church. Economists have been surprised at how well the aggregated guesses of bettors align with the real likelihoods of different outcomes in all sorts of events. In economic terms, bettors are essentially traders in an efficient market, where prices are very close to the actual values of whatever is being bought and sold. Betting markets have outdone pundits, polls and the press in predicting other elections. During the past four U.S. presidential campaigns, economists at the UNIVERSITY OF IOWA have operated an Internet-based futures market where anybody who wants to can bet on one of the two major-party candidates. In the extremely tight 2004 election, for example, virtually every authoritative source considered the race too close to call right up to election night. But the Iowa market gave George W. Bush a clear edge from the end of the Republican convention in early September. The newspaper is based in North Carolina. The story also appeared on the websites of KATC-TV in Louisiana, CBS4-TV in Denver; 570 NEWS, MACLEANS and CANADA EAST in Canada; NEW YORK TIMES; SAN JOSE MERCURY NEWS, CONTRA COSTA TIMES, SAN LUIS OBISPO TRIBUNE, SAN FRANCISCO CHRONICLE AND MONTEREY COUNTY HERALD in California; KANSAS CITY STAR, SEATTLE POST INTELLIGENCER, NEW YORK NEWSDAY; THE GUARDIAN in the United Kingdom; WIRED NEWS; DULUTH NEWS TRIBUNE and ST. PAUL PIONEER PRESS in Minnesota, CHARLOTTE (N.C.) OBSERVER, MYRTLE BEACH (S.C.) SUN NEWS, FORT WAYNE (Ind.) NEWS SENTINEL, and several other media outlets.