Abstract
Prediction markets have been found to provide relatively accurate and inexpensive means for forecasting various events including elections results. However, since in most political elections, there exist public polls that predict the results as well as betting houses that publish odds on the various candidates and since voters obtain information from these sources, the marginal contribution of prediction markets is uncertain and needs to be assessed empirically. In this chapter, we investigate the correlations between poll results and prediction markets results throughout the election campaign in Israel prior to the April 2019 elections and compare their accuracy. We show that although correlated and influenced by the polls, prediction markets have some value. Given their minimal costs of operation, such markets are worthwhile.
Original language | English |
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Title of host publication | Behavioral Finance |
Subtitle of host publication | A Novel Approach |
Publisher | World Scientific Publishing Co. |
Pages | 3-17 |
Number of pages | 15 |
ISBN (Electronic) | 9789811229251 |
DOIs | |
State | Published - 1 Jan 2020 |
Externally published | Yes |
Bibliographical note
Publisher Copyright:© 2021 World Scientific Publishing Company.
Keywords
- Israeli elections
- Political stock markets forecasting
- Polls
- Prediction markets