The Common Wisdom ???

By: loboforestal
Published On: 6/3/2006 3:08:47 PM

There's a little trick both political junkies and casual users can do to monitor elections.  Sure you can take a look at published polls, but they're not perfect.  Sometimes "the market" has a better feel for what's really going on than the pollsters. Some economists have tried to back up that notion by trying to prove it by setting up auction sites where participants bet either real or funny money on the outcome of some public event.

Now the Brits love to gamble and will gamble on anything.  With the internet, they've gone international and allow even mere Yanks (and Rebs) to bet on fun things like NFL games and US Senate elections.  They, of course, have an internet site (probably fire walled at your work site, but accessible from home): www.tradesports.com , Tradesports.com

There you can find all sorts of things to bet on like World Cup Soccer, Arena football, NBA and ... current events including "will bin laden get pasted" and US Senate Elections.  Which brings us to Webb vs. Miller vs. Allen.  You can gander at tradesports, I'm looking at the URL and it doesn't look like you can "direct dial" into the Virginia Senate pages.  But just go the front page : http://www.tradesports.com/aav2/menu.jsp and click on the left menu "Trading Categories" and click on politics, then senate, then virginia ... you get the idea.  The common wisdom is that Jim Webb will beat Harris Miller (not a done deal, yet,  there are a lot of variables still out there; but looking good for Jim).  So the labels "VA.SENATE06.GOP" means George Allen and "VA.SENATEO6.DEM' means Jim Webb. "VA.SENATE06.DEM" means "the field" or all the other candidates.

If you click on the charts you'll see the long term betting.  Now these are bid/ask prices are are what people are paying to make a bet that one of the candidates win.  I like to think that the numbers represent the probability of victory but I'm not sure if that's technically correct, some game theorist can straigten me out.  I just look at it a little to try and get a feel for the ups and downs and prices that people with real honest to god shoulda paid the rent with money.  Anyway, I like to think that average of the big/ask is the probalbility that that candidate can win.  50 cents on the dollar means 50 percent chance.

Some interpretation/insta-analysis/crystalballing on the Virgina Senate Elections is this: "The field" trading a zero favors Webb, it means that independents, greens, peroites, bullmoosers, knownothings, bluedogs and mugwumps are going to vote Webb.  The recent trade with the Dems up and the Reps down means that Webb is considered to have solidified his lead in the primary and will win on June 13th [again: not a done deal ].  It looks like Webb is pushing the general election into the competitive zone. The downside is the charts says, right now, we only got a 15 percent chance.  If Webb can push that to 20/25 percent in the next few months he's going to get some serious local and national attention.  (Remember, these are "probablities", not "polling percentages" : the numbers mean different things).  This looks like it's gonna be a good dog fight.  My money's on Jim Webb.

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