The Power of Predictive Markets

This is from the blog at casualobserver.net, a client of Inkling and a predictive market site dedicated to politics:

Gaithersburg, MD – Nov. 10, 2006 – CasualObserver.net, the only political stock market dedicated to midterm election coverage, today announced the results of its predictions for the 2006 midterm elections. CasualObserver.net covered 72 of the most competitive House, Senate, and Gubernatorial contests across the country and correctly predicted:

Democrat takeover of the Senate

82% of all races tracked on the site

90% of Gubernatorial races

100% of Senate races

74% of House races

Hotly contested and critical MO, MT and VA Senate races

In a head-to-head comparison CasualObserver.net’s race predictions were more accurate than those of a leading polling organization that was ranked number one by Slate magazine for accuracy in the 2004 Election. CasualObserver.net’s combined accuracy rate for the Gubernatorial and Senate races was 94.59% versus 91.89% for Rasmussen Reports. Rasmussen did not report on House races. The CasualObserver.net pricing data used for comparison were collected Election Day morning and thus reflected the aggregated opinions of traders prior to the release of any exit polling or raw vote numbers.

CasualObserver.net was launched in April as an interactive forum for political pros and armchair pundits to express their opinions on who the winners would be in the 2006 midterm elections. Rather than taking the typical periodic opinion poll approach to determine the likely winners, CasualObserver.net created a virtual stock market where candidates were traded like stocks. Unlike opinion polls where random respondents react to poll questions, CasualObserver.net was comprised of active, engaged traders who shared their opinions by making smart trades. The CasualObserver.net marketplace not only gathered opinions on who would win, but allowed each user to demonstrate how confident they were in their opinion, and how events and circumstances change that opinion over time.