STOCK markets are better than pollsters at predicting the results of
elections, according to American researchers. They even predicted a dead heat
between Bush and Gore in the presidential election a year ago—unlike
almost every opinion poll.
In the past four US presidential elections Thomas Rietz and his colleagues at
the University of Iowa have set up a futures market in which players have a
financial stake in predicting the result of the election. Traders buy shares in
the candidate they think will win, which they can cash in when the contest is
over.
Rietz says the predictions of…
