Comparing the Forecasting Accuracy of Prediction Markets and Polls for Taiwan’s Presidential and Mayoral Elections

Abstract

This paper devises a methodology to compare the accuracy of prediction markets and polls. The data of the Exchange of Future Events (xFuture) for Taiwan’s 2006 mayoral elections and 2008 presidential election show that the prediction markets outperform the opinion polls in various indices of accuracy. In terms of the last forecast before the election date, the accuracy of the prediction markets is 3 to 10 percent higher than that of the opinion polls. When comparing the accuracy of historical forecasts, the prediction markets outperform the polls in 93 to 100 percent of the cases. Moreover, the average accuracy of the prediction markets is 9 to 10 percent higher than that of the polls, with a standard deviation more than 2 percent less than that of the polls. To examine the robustness of these comparisons, this paper conducts two tests including daily forecast and normalized accuracy, and finds that the prediction markets successfully pass the tests with a significantly better accuracy than the polls.

Sports lottery game prediction system development and evaluation on social networks

“…The prediction price can be used as a reference to predict whether an event occurs . Participants trade futures according to judgement price movements and prediction results (Tung et al, 2011a). Kalampokis et al (2013) studied predicting future events and surveyed recent research on techniques, methods, and empirical studies to understand the predictive power and limitations of social media.…”

“…The time is money that a user can buy a low price early 767 Sports lottery game prediction system based on accurate prediction; hence, that particular user will be rewarded for an accurate event prediction. Users have to collect additional useful information to win high rewards among a similar pool of participants (Tung et al, 2011a;Slamka et al, 2008). An official event exchange website xFuture.org was established to predict the future of markets including finance, politics, sports, and technology (especially for election prediction).…”

“…Several studies have discussed the accuracy of market predictions, and most of them have adopted a differential per cent value as a metric to evaluate the accuracy. Tung et al (2011a) obtained data from the Exchange of Future Events to evaluate the Taiwanese mayoral and presidential elections and compared the accuracy with those of the historical forecasts. They conducted two tests with daily forecasts and found that the prediction markets outperformed the polls with a 9-10 per cent higher accuracy with a 2 per cent standard deviation (Tung et al, 2011b).…”