UBC Launches Online B.C. Election Prediction Market

Associate professor Werner Antweiler | BCBusiness
Associate professor Werner Antweiler

Want to make a bet on the May election?

 The Sauder School of Business at UBC has launched an online prediction market for political junkies willing to invest up to $1,000 in the May 14 election. The market tracks popular vote share, legislative assembly seat share and the likeliness of a majority government.
The online, real-time web platform allows participants to purchase and trade “shares” representing the political parties. The likelihood of a BC Liberal majority is trading at two cents—or a two per cent chance of occurrence—while NDP’s seat share is riding high at 65 cents. 
Associate professor Werner Antweiler founded the non-for-profit UBC Election Stock Market in 1993. The project ran until Antweiler left to focus on raising his kids in 2008. After its January relaunch, site participants can now also trade on Bank of Canada interest rate announcements. “Hopefully that will allow us to help us research a project in which we would determine if monetary policy is fully anticipated or not,” says Antweiler.
The market has attracted about 100 traders. “They are putting the money where their mouth is, they are putting their money on what they believe is the likely outcome, and that requires that they pay attention to the political process.”
“Investing their own money motivates traders to make informed decisions free of political bias to earn profits by predicting the political parties’ fortunes,” Antweiler said in a news release. “Whereas polls can lag by several days before their results become available, prediction markets are forward-looking and take into account momentum.”
So do dollars and bets make for better predictions of electoral outcomes?
“I don’t see why they would,” says pollster Evie Mustel, owner of Mustel Group. “They’re trying to see what is happening in the future, what kind of events are going to unfold, what kind of debates are going to take place, what kind of statements are going to be made, what kind of platforms are going to be released. Until they are, I don’t see how that would be anymore accurate than doing a poll of how people feel today.”
Antweiler hopes to branch out with prediction markets on long-term environmental scenarios. Antweiler is launching a new market March 1 that will predict the extent of the arctic sea ice in mid-September. “We’re interested in using the crowdsourcing tool to help refine the forecasts and provide a monetary incentive to improve the model that predicts these changes, because the models that get it right, that are the best, that give the best prediction, they will be the ones that are profitable.”