FEATURE2 November 2016

The Guessing Game

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At a time when shock election results are becoming commonplace, Justin Charlton-Jones, managing director of Blinc, and James Endersby, chief executive of Opinium, go head to head to discuss the respective merits of predictive markets and opinion polls for forecasting outcomes


Justin Charlton-Jones:

In both the Scottish Referendum in 2014 and the General Election of 2015, opinion polls suggested that the final result was too close to call. In fact, both votes resulted in decisive outcomes, and the poll results were so far removed from the actual General Election outcome that a formal enquiry was carried out by the National Centre for Research Methods to try to understand why. 

However, an alternative research methodology – predictive markets – accurately forecast the outcome of both elections (months in advance) and has shown itself to be more accurate than conventional polling at anticipating the outcomes of a raft of other events.   

The earliest prediction market – The Iowa Electronics Market (IEM), which has primarily been used in the political domain – was developed in Iowa University in the late 1980s and is still running. A research paper from Stanford University (Wolfers and Zitzewitz, 2004) asserts that the market has both ...