Monthly Archives: September 2006

Prediction Market Fever Sweeps Holland

Holland’s premier newspaper de Volkskrant just launched a real-money online political stock market powered by NewsFutures. The “Politieke AandelenMarkt” (PAM – meaning “political stock market”) lets participants invest in the success of various political parties and their leaders in the upcoming November 22 parliamentary election that will produce the country’s next coalition-government.

The PAM has already been extensively featured in several television shows, including this 15 minutes video segment broadcast on RTL TV today.

On the PAM participants buy political shares that they think are undervalued, and sell those that they think are overvalued, knowing that the final, definitive value of the shares will be decided by the outcome of the election. There are stocks for each candidate prime minister, each party’s vote share, and each coalition’s chances of forming the next cabinet. The market is in fact a large interactive opinion poll about the election’s expected outcome, independent of political preferences. The market will close when the new government cabinet will stand with Queen Beatrix for the traditional photograph.

Everyone who owns a bank account in the Netherlands can participate. Participants invest their own real money, with accounting-firm KPMG handling the financial administration. Participants can fund their trading accounts with a maximum of 100 euro (approx $125). De Volkskrant obtained permission to run this unusual financial market from the Dutch market regulation authorities.

De Volkskrant had previously teamed with the University of Iowa to run IEM-powered markets in 2002, when one of the lead candidates was assassinated a week before the election, and again in 2003 after attempts to put together a government were finally abandoned and new elections called. This time around, IEM’s Forrest Nelson recommended to de Volkskrant that they use NewsFutures industrial-strength solution. Thanks Forrest!

PS: With this forray into Dutch politics, NewsFutures extends its on-location coverage of political events around the world. See also: US congressional elections (in English), French presidential election (in French), and Political instability in Hungary (in Hungarian).

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