News & Events

Story Explains Iowa Electronic Markets

The longest-running online market for political prognostication is up and running -- and there are already a couple of front-runners. For now, it's Obama and Giuliani. The idea behind the Iowa Electronic Markets is relatively simple, if unorthodox: You trade contracts in the various candidates or parties as if they were offerings on a commodities market, at prices ranging from zero to $1. After the election, each contract pays off $1 if you predicted the correct outcome -- and nothing for the losers. "We like to say this is not rocket science, it's just a case of putting your money where your mouth is," said GEORGE NEUMANN, an economics professor at the University of Iowa and one of the market's inventors.


Return to top of page