Prediction Markets: Research and Limits

Fact: A story in Science Daily this week, “Election Forecasters Preparing For Historic Election,” relates the publication this month of the “assembled insights of prominent election forecasters in a special issue of the International Journal of Forecasting.” 

Analysis:  The journal articles are available here for download.  One of them, “Prediction Market Accuracy in the Long Run” (by Joyce E. Berg, Forrest D. Nelson, and Thomas A. Reitz from the University of Iowa’s Tippie College of Business), compares the presidential election forecasts produced from the granddaddy of them all, the Iowa Electronic Market (IEM), to “forecasts from an exhaustive body of opinion polls.”  Science Daily says they find that the IEM is “usually more accurate than the polls.”

If we extrapolate out, these election markets are special cases of prediction markets, and I’m always interested in those.

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Do Voters Love the Candidates… or their Fonts?

FACT:  John McCain, Hillary Clinton, and Barack Obama have chosen distinctively different typeface fonts for their campaign posters, bumper stickers, and TV-ad logos. 

font-gotham-obama.jpgObama uses sans serif Gotham.  McCain uses sans serif Optima. Only Clinton uses a serif, New Baskerville.  According to the Los Angeles Times yesterday, many typographers are following the usage choices closely, and now some political analysts are finding message in the medium; Obama’s choice is “the hot font of 2008,” Clinton’s font flourishes “conjure trustworthiness,” while McCain’s communicates an “old-fashioned yet quirky vibe.”

ANALYSIS:  Anyone who remembers their first experience with a personal computer’s word-processing program recalls that initial thrill when the realization hit: I can choose any font? I can choose any font!!!

Billions of funky emails, resumes, and yard-sale posters later, we’re all perhaps jaded by the profusion of font styles, and tend to have built up biases and defenses regarding certain looks.

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