Betting Exchange Says 87 Percent Chance of Republicans Taking Over House
The online betting exchange intrade.com has 87 percent of the betting action in favor of a Republican majority takeover in the House of Representatives come Election Day next month.
Prediction markets have proven highly accurate especially as they pertain to political elections.
From Wikipedia:
Steven Gjerstad (Purdue) in his paper "Risk Aversion, Beliefs, and Prediction Market Equilibrium," has shown that prediction market prices are very close to the mean belief of market participants if the agents are risk averse and the distribution of beliefs is spread out (as with a normal distribution, for example). Justin Wolfers (Wharton) and Eric Zitzewitz (Dartmouth) have obtained similar results, and also include some analysis of prediction market data, in their paper "Interpreting Prediction Market Prices as Probabilities” In practice, the prices of binary prediction markets have proven to be closely related to actual frequencies of events in the real world.
The Republicans are currently well ahead in raising campaign. Case in point, Republican Senate nominee Sharron Angle reported raising a whopping $14 million in the critical third quarter, according to Fox News.
To that extent, Intrade.com had Angle a 60 percent likelihood of beating Democrat Harry Reid, who was once well ahead in the polls.
Meanwhile, Christine O’Donnell was diminished to having a 7 percent chance of being elected in the much-watched Delaware Senate race. – Aaron Goldstein, Gambling911.com reporting.
