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CONTACT: GEORGE MCCRORY
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e-mail: george-mccrory@uiowa.edu

Release: Oct. 28, 1999

Gore, Bush show strong support in Iowa Electronic Markets

IOWA CITY, Iowa — Iowa Electronic Markets (IEM) traders favor Republican George W. Bush and Democrat Al Gore as future presidential nominees, but the prospects for their challengers have been increasing.

In the Democratic Convention Market, Bill Bradley’s price has increased from 25 cents on Sept. 1 to 38 cents as of today (Thursday, Oct. 28). This 38-cent price indicates that IEM traders believe Bradley has a 38 percent chance of winning the Democratic nomination for president.

Gore still holds strong favor with IEM traders, although his contracts have slipped from a high of 75 cents on Sept. 3 to 62 cents today. The IEM is a real-money political futures market at http://www.biz.uiowa.edu/iem run by professors in the University of Iowa Henry B. Tippie College of Business.

"IEM traders saw little news in last night’s debate (between Gore and Bradley)," said UI Professor Joyce Berg, one of the IEM directors. "Although individual traders changed their positions, the market consensus did not change. IEM prices indicate that our traders believe that Gore is almost twice as likely as Bradley to win the nomination."

In the Republican Convention Market, prices for Bush have remained mostly unchanged in October at 74 cents, after retreating from an 80-cent high on Sept. 27. The most movement in the IEM Republican market has been seen in the rest-of-field contract, which includes John McCain, Gary Bauer, and other Republican contenders. The rest-of-field contract has nearly doubled in price, up from 12 cents on Sept. 26 to 24 cents today.

Shares for Steve Forbes have remained flat over the last two months, trading at about 5 cents. Even before her Oct. 20 announcement to drop out of the race, presidential aspirant Elizabeth Dole’s shares were at only 2 cents, dropping to one-tenth of a cent on the news.

The IEM also conducts markets based on the two Houses of Congress and New York Senate race, in which New York City Mayor Rudolf Giuliani’s contract is trading at 57 cents, while First Lady Hillary Clinton’s contract is at 35 cents.

Since the New York Senate and presidential nomination markets opened in June, the IEM has attracted almost 3,500 trader accounts with a total equity of about $70,000; more traders are expected to log on as the election season continues.

Started in 1988 at the UI, the IEM was developed as a way to teach students about commodities futures markets and permit detailed studies of how those markets operate. The Iowa Electronic Markets traders buy or sell contracts shares in candidates for political office. Winning contracts pay $1; losing contracts pay nothing. For an investment of as little as $5 or as much as $500, IEM traders can participate in these markets.

The IEM has forecasted election results with great accuracy, tracking the vote shares in the last three presidential elections within an average of 1 percent.

For more information, contact IEM operations office at (319) 335-0794. Detailed trading information can be found in the IEM website at http://www.biz.uiowa.edu/iem