The Free Market Predicts Obama Will Win California Tomorrow

Intrade Obama 2008Two electronic predictive markets that offer trades on the Democratic Presidential Primary in California tomorrow both predict wins for Barack Obama.

InTrade Prediction Markets, trading real money, is currently trading a Barack Obama win in California at 57.6, with Hillary trading at 30.5.

The National Journal Political Stock Exchange, a free site, is currently trading a Barack Obama win in California at 58.0, with Hillary trading at 38.0.

Though these same markets failed to predict Hillary’s Primary win in New Hampshire, they have otherwise often proved to be fairly accurate.

These websites allow users to buy and sell shares in predicting political outcomes. For any given race, a correct outcome is worth $1.00 per share. Leading up to the outcome, you can buy our sell predictions on which candidate will win, with the price of that share representing the marketplace’s view on the likelihood of that outcome. For instance, if you were to say that there is an equal likelihood of the Democrat or Republican winning in a particular race, each candidate’s share should trade for $0.50. If a particular candidate is more likely to win, their share will trade closer to the full dollar.

In my book, it’s still too close to call.

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