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.