How the Iowa Electronic Markets Work

Sept. 16 1999 9:01 PM

How the Iowa Electronic Markets Work

Pundits often talk about a candidate's stock going up or down. At the Iowa Electronic Markets (operated by the University of Iowa's Henry B. Tippie College of Business), this really happens. You can bet on a candidate by buying stock in him or her. If the candidate wins, you get a dollar for each share you own. If he loses, your shares are worthless. The amount you pay for each share depends on the seller's confidence that the candidate will win. When the candidate is doing well in the race, investors are confident that their stock will pay off, so they charge more for it when they sell. When he's doing poorly, they charge less. If you buy shares in the candidate when his stock is low, you don't have to wait for Election Day to cash in. You can sell your shares at a profit as soon as his stock improves.

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Right now, the Iowa markets are trading stock in four contests: The Democratic presidential nomination (click here to see the prospectus and latest quotes), the Republican presidential nomination (click here), the New York Senate race (click here), and which party will control Congress (click here). "Office Pool" reports the latest share price for each candidate or party as of noon ET that day, along with Slate's analysis of who's up, who's down, and why. For updates or more complete information, visit the Iowa Electronic Markets site.

Will Saletan writes about politics, science, technology, and other stuff for Slate. He’s the author of Bearing Right. Follow him on Twitter.