Prediction market online

An Auckland University engineering student has set up an online political stockmarket that lets punters make virtual money by predicting the outcome of this year's general election.

Prediction markets are a rising phenomenon, and Qi-Shan Lim says he was inspired to create www.political stockmarket.co.nz by similar sites for the United States presidential race.

The markets are touted as being more accurate than opinion polls as members are more likely to predict actual rather than desired outcomes.

Mr Lim, 19, says members can buy and sell shares, called contracts, in a "party" market with virtual money, according to whether they think the percentage of votes a party will receive is likely to increase or decrease.

For example, if a member thinks the market prediction that the National Party will receive 44 per cent of the party vote is too low, they can buy contracts and sell them for a profit once this percentage, and the price of National contracts, has increased.

Mr Lim says those with the highest net worth at the end of the election will receive prizes.

New members receive "$50,000" in virtual money and 500 contracts for each party. Markets may also be set up for key electorates.

- © Fairfax NZ News