Nelson Discusses Accuracy of IEM

A story about research using prediction markets to predict political election outcomes explains that, unlike an opinion poll, investors in a market must choose who they think is going to win, not who they necessarily intend to vote for, and must vouch for that candidate with hard cash. Since the Iowa Electronic Markets was founded in 1988, this has proved vastly superior to traditional opinion polls. "Comparing markets and polls across entire elections," says Professor FORREST NELSON, one of the researchers, "the market is closer to the actual outcome than the polls about 74 per cent of the time." The Telegraph is published in Great Britain.

Is a registered trademark of the Tippie College of Business