With Jon Huntsman's exit from the Republican primary race there are five main candidates left, and Mitt Romney holds a commanding lead among them with a 89.1 percent chance of gaining the Republican nomination, according to prediction market data. Ron Paul follows him at 4.1 percent, Newt Gingrich at 2.5 percent, and Rick Santorum at 1.2 percent. Since the dust settled in New Hampshire, Romney has slowly drifted upwards in his likelihood of winning the Republican nomination as it becomes more likely there would be no coalescing around a single challenger in South Carolina.
Mitt Romney went into Iowa as the heavy favorite to win the Republican nomination and he leaves New Hampshire in the same position. Unlike the see-saw like swings in the Democratic nomination battle of 2008 or the steady movement in the Republican nomination battle of 2008, all of the candidates' positions remained relatively static during the entire period surrounding these first two primary contests.
Considering the following chart, which shows the market-based odds over the course of the Iowa and New Hampshire contests for both this and last cycle:
Mitt Romney is heavily favored to win both the New Hampshire primary and, eventually, the Republican nomination. Utilizing prediction market data, Romney has a 97.3 percent likelihood to win the New Hampshire primary and an 80.0 percent likelihood to win the nomination. Those are great odds for the former Massachusetts governor, but they are not absolute. Here are a few things to remember if you're banking on that other 20 percent.
Follow this table tonight live. It is going to be an interesting New Hampshire primary as we see who will pull off the now very tight second and third positions.
The continued position of Spreading Santorum and other sites is a reflection
of what Internet users want to read about. Chris Wilson, now with us at The Signal, wrote a few months ago in Slate that Spreading Santorum's prevalence cannot simple be explained away as an organized smear campaign. In the past, links from other sites were hugely important in determining a page's position in search results; thus, an ultimately irrelevant site could do well in search results by getting a lot people to link to it. But search companies have refined their algorithms to make them much harder to play these games. For Spreading Santorum to remain this strong, despite the launch of Santorum's presidential campaign, is a sign that it's still relevant to the primary.
For curious searchers, there's plenty to read about. Consider a sampling of his positions:
Santorum has repeatedly expressed support for overturning Griswold v. Connecticut, which legalized contraceptives for married couples. In a now-famous 2003 interview with an AP reporter, he categorized same-sex relationships alongside pedophilia and bestiality–comments that ultimately inspired Savage, the founder of the "It Gets Better" campaign, to start his alternative site. Santorum attributes the Catholic Church sex scandals to the loose morals of Boston, a position he defended to a stunned George Sephanopoulos in 2005. He recently attacked Barack Obama's pro-choice views on the basis that Obama is black. He told David Gregory he would prosecute doctors who perform any abortions, even in cases of rape or incest. He believes that the Constitution should treat the cells created at conception as a life, which would in practice give them precedence over the human carrier; even Mississippi voters rejected this position in 2011.
Where prediction markets really showed their value was in the real-time aggregation of information. They did not favor Romney all night long, but were constantly digesting and aggregating all the recent and relevant dispersed information. Just as voting began, entrance polling showed that Ron Paul was doing well among the anyone-but-Romney crowd. Accordingly, the markets moved away from Santorum toward Paul. Yet, while the vote totals and pundits were still trumpeting Paul, prediction markets reversed their course in less than two hours moved toward a tight Romney and Santorum race.
The most impressive stretch of time for the prediction markets was as the last few results trickled in at around midnight Eastern time, four hours after voting began. Santorum was consistently winning in the vote total to the very end, but the markets knew what was left to be counted. At 11:54 PM ET I tweeted: "Markets still favoring Romney in IA even though he is down by 113 votes with 96% reporting? Almost everything left is college town of Ames." While the ultimate outcome was extremely close, the prediction markets were able to incorporate all available information to provide an efficient data point during the vote counting.
A few hours before the Iowa caucuses begin, Mitt Romney is just over 50 percent likely to win this first-in-the-nation primary contest, according to data from the prediction markets Betfair and Intrade. This is a strong recovery for the candidate, who was trailing both Newt Gingrich and Ron Paul for much of December. And it is only one of four major changes that have taken place in the prediction markets for Iowa in the last few days.
Since last Thursday, Paul has fallen from a high of over 50 percent likelihood of victory to just about 25 percent. Rick Santorum has pulled away from the trailing pack of candidates to become a serious contender. And most interestingly, the markets that once gave Gingrich a 60 percent chance of winning have completely written him off, along with any other candidate, contrary to the polls that still have him at about 14 percent.
This week the real action begins in two beloved American sports: politics and football. And analyzing the football playoffs can tell us a lot about how we predict elections. Using prediction market data from Betfair and Intrade, the Green Bay Packers have a 32 percent chance of winning the Super Bowl. The next best likelihoods go to the New England Patriots at 18.5 percent and the New Orleans Saints at 15.3 percent. The Packers and the Patriots both have a first-round bye in the playoffs, so they need to win three rounds of contests to capture the championship; the Saints are in the wild-card round, so they need to win four rounds.
We can think of the presidential election as a two-round playoff for Republicans, with the added twist that all the teams play one another at the same time in the first round, with a play clock that ticks down over months instead of minutes. (President Obama gets a bye in the first round, facing no significant challenge to the nomination). Utilizing the same prediction market data, Mitt Romney has a 36.8 percent likelihood of becoming president, still far behind Obama's 52.0 percent likelihood of reelection.
The chart shows how these three main predictions have shifted during the course of the year. Obama had a small spike when Osama Bin Laden was captured, but otherwise he's been on a slow decline for most of the summer and early fall, with a slow resurgence in the late fall and early winter. The Senate has been relatively steady with small spikes corresponding to shifts in specific seats, including retirements and announcements of new candidates. The House has shown the most flux with a steep decline that mirrored the President's, but continued longer into the fall. Yet, it has taken a sharp turn towards the Democrats in recent weeks:
Gambling is about demonstrating confidence in potential wins and losses. Romney is making an investment with a huge potential upside and small potential cost. For Gingrich and Perry a poor showing in Iowa followed by a beating in New Hampshire would leave both limping and bleeding heading into South Carolina; they have serious costs if their bets do not succeed.
There is a meaningful fight in Iowa, but Romney is secure in New Hampshire: