Prediction markets in the 2024 presidential election
Date: November 5, 2024  |
2024 • 2020 • 2016 |
This page provides an overview of prediction markets relating to the 2024 presidential election. The PredictIt charts show the state of each market on PredictIt with data updated every 60 seconds, and the RealClearPolitics charts show prediction market averages updated daily. The following charts are available on this page, PredictIt.org, and RealClearPolitics.com:
What is a prediction market?
Prediction markets allow users to purchase shares relating to the outcome of events using real money. Each event, such as an election, has a number of contracts associated with it, each correlating to a different outcome. For instance, an election contested between four candidates would be represented by eight separate contracts, with each contract correlating to a particular candidate winning or losing the election.
The share price in each individual forecast rises and falls based on market demand. Once the event's outcome is decided, holders of shares that correlate with the correct outcome receive a payout for each share they held.
For example, a user buys 10 shares at 20 cents each in a presidential primary saying Candidate A will win. If Candidate A wins the election, the user earns $10. If the candidate loses, the user earns no money and loses his original $2 investment.
Why do prediction markets matter?
Prediction markets can be used to gain insight into the outcome of elections. Microsoft Research economist David Rothschild argued that they are better suited to the task than polls: "I can create a poll that can mimic everything about a prediction market...except markets have a way of incentivizing you to come back at 2 a.m. and update your answer."[1][2][3]
General election markets
- See also: Presidential candidates, 2024
PredictIt
The chart below shows 2024 presidential general election open share prices over time.[4]
RealClearPolitics prediction market averages
Democratic presidential primary markets
- See also: Democratic presidential nomination, 2024
PredictIt
The chart below shows 2024 Democratic presidential primary open share prices over time.[5]
RealClearPolitics prediction market averages
Republican presidential primary markets
- See also: Republican presidential nomination, 2024
PredictIt
The chart below shows 2024 Republican presidential primary open share prices over time.[6]
RealClearPolitics prediction market averages
Background
PredictIt
PredictIt was created by Victoria University of Wellington, New Zealand, for educational purposes in 2014. U.S.-based company Aristotle International supports the project with data processing and verification services.[7][8]
The Washington Post reported that PredictIt spokesman Will Jennings said the site was accurate 70 to 80 percent of the time, although it was difficult to make a “blanket accuracy assessment, given the variety of markets." In November 2019, the site had 200,000 subscribers and 3,000 active traders each day.[9]
Noteworthy events
On March 2, 2023, the Commodity Futures Trading Commission (CFTC) announced it planned to withdraw the decision to rescind PredictIt's no-action letter, which allowed the platform to operate legally.[10]
The CFTC initially announced it intended to rescind PredictIt's no-action letter on August 4, 2022, with an effective date set for February 2023.[11] On its website, PredictIt said that barring any changes in CFTC policy, it would halt trading on February 15, 2023.[12]
On January 26, 2023, the United States Court of Appeals for the Fifth Circuit issued an injunction allowing the site to continue operating while the court considered its challenge to the CFTC's action.[13]
See also
- Presidential candidates, 2024
- Democratic presidential nomination, 2024
- Republican presidential nomination, 2024
Footnotes
- ↑ Nature, "The power of prediction markets," October 18, 2016
- ↑ Politico, "Meet the 'stock market' for politics," October 31, 2014
- ↑ U.S. Presidential General Election Results, "2008 Electoral Map Based on the Intrade Prediction Market," accessed January 25, 2018
- ↑ PredictIt, "Who will win the 2024 US presidential election?" accessed December 16, 2022
- ↑ PredictIt, "Who will win the 2024 Democratic presidential nomination?" accessed December 20, 2022
- ↑ PredictIt, "Who will win the 2024 Republican presidential nomination?" accessed December 20, 2022
- ↑ Politico, "Meet the 'stock market' for politics," October 31, 2014
- ↑ PredictIt, "What is PredictIt?" accessed August 28, 2020
- ↑ <https://www.washingtonpost.com/business/economy/these-gamblers-are-putting-money-on-the-outcome-of-the-impeachment-inquiry/2019/11/13/da535bee-f0f6-11e9-b648-76bcf86eb67e_story.html The Washington Post, "These gamblers are putting money on the outcome of the impeachment inquiry," November 13, 2019]
- ↑ PredictIt, "Withdrawal of CFTC Letter No. 22-08 And Initial Determination Concerning CFTC Letter No. 14-130," accessed August 8, 2023
- ↑ Politico, "No future: Regulator orders political prediction market to shut down in U.S.," August 9, 2022
- ↑ PredictIt, "PredictIt Announcements," accessed December 23, 2022
- ↑ Twitter, "PredictIt on January 26, 2023," accessed January 30, 2023
| |||||||||||
