Predictive accuracy of political stock markets: Empirical evidence from an European perspective
AbstractIn a meta study of 25 political stock markets conducted in Germany in the last decade we analyze their predictive success. Although the predictions of political stock markets are highly correlated with the corresponding polls, the markets are able to aggregate additional information. One explanatory variable for variations in predictive success of the German stock markets relative to the polls is market efficiency. Even though the overall predictions of the political stock markets are quite reliable on the aggregate level we find systematic prediction errors on the contract level that can be attributed to the vote share size and to individual trader biases. --
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Dresden University of Technology, Faculty of Business and Economics, Department of Economics in its series Dresden Discussion Paper Series in Economics with number 05/01.
Date of creation: 2001
Date of revision:
political stock markets; forecasting; market efficiency; proportional representation;
Other versions of this item:
- Berlemann, Michael & Schmidt, Carsten, 2001. "Predictive accuracy of political stock markets: Empirical evidence from a European perspective," SFB 373 Discussion Papers 2001,57, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
- C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
- G1 - Financial Economics - - General Financial Markets
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Jacobsen, Ben & Potters, Jan & Schram, Arthur & van Winden, Frans & Wit, Jorgen, 2000.
"(In)accuracy of a European political stock market: The influence of common value structures,"
European Economic Review,
Elsevier, vol. 44(2), pages 205-230, February.
- Potters, J.J.M. & Jacobsen, B. & Schram, A. & Winden, F.A.A.M. van & Wit, J., 2000. "(In)accuracy of a European political stockmarket: The influence of common value structures," Open Access publications from Tilburg University urn:nbn:nl:ui:12-86743, Tilburg University.
- S. Baranzoni & P. Bianchi & L. Lambertini, 2000. "Market Structure," Working Papers 368, Dipartimento Scienze Economiche, Universita' di Bologna.
- Robert Forsythe & Murray Frank & V. Krishnamurthy & Thomas W. Ross, 1995. "Using Market Prices to Predict Election Results: The 1993 UBC Election Stock Market," Canadian Journal of Economics, Canadian Economics Association, vol. 28(4a), pages 770-93, November.
- Beckmann, Klaus & Werding, Martin, 1996. "'Passauer Wahlborse': Information Processing in a Political Market Experiment," Kyklos, Wiley Blackwell, vol. 49(2), pages 171-204.
- Bohm, Peter & Sonnegard, Joakim, 1999. " Political Stock Markets and Unreliable Polls," Scandinavian Journal of Economics, Wiley Blackwell, vol. 101(2), pages 205-22, June.
- Forsythe, Robert & Rietz, Thomas A. & Ross, Thomas W., 1999. "Wishes, expectations and actions: a survey on price formation in election stock markets," Journal of Economic Behavior & Organization, Elsevier, vol. 39(1), pages 83-110, May.
- Hansen, Jan & Schmidt, Carsten & Strobel, Martin, 2001.
"Manipulation in political stock markets: Preconditions and evidence,"
SFB 373 Discussion Papers
2001,61, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
- Jan Hansen & Carsten Schmidt & Martin Strobel, 2004. "Manipulation in political stock markets - preconditions and evidence," Applied Economics Letters, Taylor & Francis Journals, vol. 11(7), pages 459-463.
- Jan Hansen & Carsten Schmidt & Martin Strobel, 2004. "Manipulation in political stock markets - preconditions and evidence," Natural Field Experiments 00265, The Field Experiments Website.
- Hans Gersbach & Markus Müller, 2011. "Information Markets, Elections and Contracts," CESifo Working Paper Series 3327, CESifo Group Munich.
- Hans Gersbach & Markus Müller, 2010. "Flexible pensions for politicians," Public Choice, Springer, vol. 145(1), pages 103-124, October.
- Hans Gersbach & Markus Müller, 2006.
"Elections, Contracts and Markets,"
CER-ETH Economics working paper series
06/56, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
- Carsten Schmidt & Axel Werwatz, 2002.
"How accurate do markets predict the outcome of an event? The Euro 2000 soccer championships experiment,"
Papers on Strategic Interaction
2002-09, Max Planck Institute of Economics, Strategic Interaction Group.
- Schmidt, Carsten & Werwatz, Axel, 2002. "How accurate do markets predict the outcome of an event? The Euro 2000 soccer championships experiment," SFB 373 Discussion Papers 2002,29, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
- Hans Gersbach & Oriana Ponta, 2012.
"Unraveling Short- and Farsightedness in Politics,"
CER-ETH Economics working paper series
12/158, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
- Michael Berlemann & Forrest Nelson, 2005. "Forecasting Inflation via Experimental Stock Markets Some Results from Pilot Markets," Ifo Working Paper Series Ifo Working Papers No. 10, Ifo Institute for Economic Research at the University of Munich.
- Michael Berlemann, 2004. "Experimentelle Aktienmärkte als Instrumente der Konjunkturprognose," Ifo Schnelldienst, Ifo Institute for Economic Research at the University of Munich, vol. 57(16), pages 21-29, 08.
- Berlemann, Michael, 2001. "Forecasting inflation via electronic markets: Results from a prototype market," Dresden Discussion Paper Series in Economics 06/01, Dresden University of Technology, Faculty of Business and Economics, Department of Economics.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (ZBW - German National Library of Economics).
If references are entirely missing, you can add them using this form.