Huckabee Debuts Strong, Then Fades on IEM Nomination Market
The price of a Huckabee contract opened at 23.2 cents on the IEM's Republican nomination market, indicating that the market believed Huckabee had a 23.2 percent chance of being the Republican nominee. This was close behind the second-place price of Mitt Romney, whose contract was trading at 23.9 cents.
But by 8 a.m. Wednesday, Huckabee's price had fallen to 19.8 cents, while Romney's had risen to 24.9.
Both candidates are chasing Rudy Giuliani, whose contract price led at 39.6 cents as of 8 a.m. Thursday. Other specific candidate contract prices on the Republican nomination market include John McCain at 9.4 cents and Fred Thompson at 4.5 cents.
Contracts for Huckabee were first offered for sale at noon Wednesday after the price of the Rest of Field contract on the Republican nomination market had climbed to nearly 30 cents earlier in the week. The Rest of Field contract, which includes all candidates except those with candidate-named contracts, immediately fell to 1.4 cents after the Huckabee contract was spun off.
As of 8 a.m. Thursday, the Republican Rest of Field contract had rebounded some to 5.2 cents.
On the IEM's Democratic nomination market, Hillary Clinton still led as of 8 a.m. with 64.9 cents, meaning the market believes there is a 64.9 percent probability she will be the Democratic nominee. Obama followed at 25.8 cents and John Edwards at 6.7 cents. The Democratic Rest of Field contract was selling for 2.7 cents.
The contracts will pay off when each party formally nominates its candidate at its convention next summer. Winning contracts pay $1, losing contracts pay zero. The nomination process kicks off with Iowa's first-in-the-nation caucuses on Jan. 3, 2008.
Information about the nomination markets, contract prospectuses and instructions on opening a trading account can be found on the IEM 2008 U.S. Presidential Nomination Markets Web site.
Begun in 1988, the IEM is a research and teaching tool by professors in the University of Iowa Tippie College of Business that has achieved an impressive prediction record, substantially superior to alternative mechanisms such as opinion polls. Such markets have been significantly more accurate than traditional tools in predicting outcomes ranging from political election results to movie box office receipts.
Contact: Joyce Berg, Department of Accounting, 319-335-0929