Newspaper article The Canadian Press

Trading Politics: University Runs Market to Predict Provincial Election Results

Newspaper article The Canadian Press

Trading Politics: University Runs Market to Predict Provincial Election Results

Article excerpt

Online market predicts B.C. election results

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VANCOUVER - After 20 years of running election stock markets, Prof. Werner Antweiler believes the buying and selling of shares in political parties is a more accurate way of predicting election results than public opinion polling.

Antweiler teaches at the University of British Columbia's Sauder School of Business and runs its online election market, where people use cash to buy contracts or "shares" representing political parties ahead of provincial or federal elections.

Traders can take long positions, which means buying shares in parties they think will grow in value, or short positions where they buy shares they think are overvalued. Outcomes are all tied to real election results and traders are allowed to spend between $25 and $1,000.

Election markets raise the stakes compared with traditional public opinion polls, which can be influenced by personal bias on the outcome, Antweiler said.

"But if people have to put money where their mouth is, then they may be more eager to reveal their true belief about how an election is going, even if it's not their preferred outcome."

Election markets are better than polls at absorbing new information and anticipating trends because they take into account not only what's happening today, but what people expect to happen in the future, Antweiler said.

"The idea is that futures markets are forward looking whereas polls are kind of backwards looking in the sense that they aggregate information from the past few days," he said.

Kara Mitchelmore, CEO of the Marketing Institute and Intelligence Association, said there are significant differences between polls and election markets.

"I don't think it's fair to pit one tool against another," she said, adding that investors in election markets often base their decisions on data from polls. …

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