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» Betocracy Creates Prediction Markets from Somewhat Frank
Betocracy is a new site offering easy to use tools for the creation of prediction markets on websites. Though in Beta, Betocracy has markets covering the Democratic Presidential Nominee in 2008 as well as a Stock Market for the popular [Read More]

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The Washington Stock Exchange: Stock Market For Political Futures

In more than enough time to catch the horse race, The Washington Stock Exchange (WSX for short) has appeared online. Although still in beta, the site offers users the ability to bet on future political events; things like whether the Republicans will retain control of the Senate come November, if Senator Barack Obama will announce a Presidential Run for '08, or if Bin Laden will be captured in 2007.

The Washington Stock Exchange mirrors the New York Stock Exchange as events are set to stocks and the stock price represents the likelihood that the specific event will occur. The site does not provide much information on the actual company that developed it but it does boast a very scholarly Advisory Board. Joining is free and membership includes $1 million dollars to play around with, so it's all fun and games at this point.

On Election Day we will see how accurate of a predictor the WSX really is. Yet, there are some issues that still need to be worked out. For example, in the highly publicized Connecticut Senate race between Senator Joe Lieberman and challenger Ned Lamont, Lieberman's stock is valued at $83.89 while Lamont's is $26.89. Perhaps it's counter-intuitive, but if Lieberman has an 83% chance of victory, shouldn't Lamont have only a 17% chance? Perhaps statisticians can prove otherwise. Regardless, the site is an addictive place to go for those interested in politics or campaigning. The site also features data on each stock, including past performance and total shares. Graphs showing the fluctuating price of stocks like the one representing the GOP's control of the House of Representatives are especially interesting to examine given the present political climate. The GOP retaining US Senate control is also a stock option (as shown below).

All in all, The Washington Stock Exchange offers an intriguing opportunity for political-junkies to chart public perceptions. It draws comparisons to ProTrade, the professional sports stock exchange. If the site catches on, it may become a useful tool for the politicians as well.

*Special thanks to LBJ for assisting with this article on Somewhat Frank.