CONTACT: GEORGE MCCRORY
300 Plaza Centre One
Iowa City IA 52242
(319) 384-0012; fax (319) 384-0024
Release: Aug.7, 2002
Iowa Electronic Markets open trading on U.S. Congressional control
Democrats control the U.S. Senate by a tight margin. Is it possible that after
the November elections, the Democrats will gain control of both the Senate
and the House of Representatives?
The Iowa Electronic Markets (IEM) provides political pundits and neophytes
alike the opportunity to predict the outcome of the November elections. As
of July 19, the IEM has opened a web-based futures market based on whether
the Democrats or Republicans will control Congress after the November 2002
"Currently, the market indicates that there is a strong chance the
Democrats will keep control of the Senate, however, prices show that control
of the House is up for grabs, said Joyce Berg, IEM co-director and professor
of accounting at the Tippie College. The IEM is run by six professors at the
Henry B. Tippie College of Business at the University of Iowa. See a prospectus
and current prices at http://www.biz.uiowa.edu/iem/markets/data_Cong02.html.
The IEM is a small-scale, real-money market used as a teaching and research
laboratory. For an investment of as little as $5 or as much as $500, trading
in the markets is open to participants worldwide. At the close of trading
on Nov. 7, the liquidation value of the contract that represents the actual
outcome of the election will be $1. All other contracts will have a value
Since its beginning in the 1988 U.S. Presidential election, the IEM has
established a reputation for forecasting election results with great accuracy,
with an average prediction error of 1.37 percent.
During the 2000 presidential elections, the IEM has attracted 7,000 traders
and had over $210,000 in equity.
For more information, see the Iowa Electronic Market website at http://www.biz.uiowa.edu/iem
or contact the IEM office at (319) 335-0881.