Political prediction markets predict VP choices
Political prediction markets are playing a greater role in gauging public opinion and political news by forming likelihoods of certain political events happening. These markets have become quite popular in this 2016 presidential election. Sites like Pivit and PredictIt.org staged markets for the vice presidential choices of Republican nominee Donald Trump and Democratic Nominee Hillary Clinton with remarkable accuracy.
Pivit’s prediction market for the Democratic VP nominee initially had Elizabeth Warren as the most likely to receive the nod. She reached a peak of 43% on Sunday, June 19. The chair of the congressional oversight panel was seen as the likely choice to be chosen as vice president, as she strongly denounced Trump and supported Hillary Clinton in recent months. As someone who famously confronted Wall Street interests throughout her career, Warren would have appealed to Bernie Sanders’ supporters, some of whom recently expressed dissent on the floor of the Democratic National Convention. Pivit’s chart shows Virginia Senator Tim Kaine overtaking Warren on June 22 and maintaining a lead over Senator Warren until the official announcement on July 22. The other candidates up for vetting remained consistently lower on the prediction market. United States Secretary of Housing and Urban Development Julian Castro remained at a 15% chance for part of the market before falling in late June. New Jersey senator Corey Booker, and US Secretary of Labor Tom Perez remained at very low levels for the duration of the market.
Pivit’s market reflects the changing political insight and knowledge into who Hillary Clinton was more likely to choose. Clinton’s top two choices quickly became clear; it was either going to be an all female ticket, the first in American history, or Clinton would opt for the stable and reputable political choice in Tim Kaine. Ultimately choosing the latter, Hillary’s choice could prove pivotal is winning over the Latino vote and appealing to disaffected republicans.
PredicIt.org had its own prediction market for the democratic VP choice between Senator Kaine, New York mayor Bill de Blasio, former Rhode Island governor Lincoln Chafee, and former governor of Maryland Martin O Malley. In this prediction market, Tim Kaine began the market at a share price of 20 cents with his competitors as about 1 cent each. This market accurately predicted Kaine would be the vice presidential nominee.
On the Republican side, Predictit had a prediction market which included Mike Pence, and three of Donald Trump’s primary election opponents: Senator Marco Rubio, governor of Wisconsin Scott Walker, and Ohio governor John Kasich. Donald Trump delivered public statements about how he was reducing the pool of who he was vetting, even giving numerical figures on how small the pool was. In this market, Kasich had the highest share price and percent chance at around 6% before late June, when Mike Pence had emerged as a clear favorite for the spot. Predictwise.com had a political prediction market as well, which focused on Newt Gingrich and Mike Pence. Former House Speaker Gingrich had the highest probability in this market until June 27, before Mike Pence overtook him and the percent likelihood for his vp chances dramatically went up.
Much like Hillary Clinton’s choice, Mike Pence is a competent politician with a clean record. The prediction markets were able to capture the indicating factors (ex. meetings between nominees and potential VP choices) and narrow the likelihood to the current VP choices. Prediction markets like those at Pivit and Predictit will continue to reflect the dynamic elements at play in the presidential process, and have shown the turns that defined the process the VP selection process.