Data collected from Predictit on September 8, 2020

On this date, 19 states had market probabilities on the Predictit website less than 90 percent and greater than 10 percent for the Democrats winning the state. The 19 states, ranked by market probabilities for the Democratic candidate, are:

"sumvotes" is the sum of the electoral votes of all the states ranked above the state plus the state's vote. 270 votes are needed to win. You can see that Arizona or Pennsylvania is the pivot state (they have equal probabilities). If Biden takes Arizona or Pennsylvania and all the states ranked above it, he gets 270 or 290 votes. Of the states ranked below Arizona and Pennslyvania, he could also win by not taking Arizona and Pennsylvania but taking Florida. This would, of course, violate the ranking assumption.

There is evidence that traders are more or less using the ranking assumption. According to the ranking assumption, the probability that the Democrats get a majority in the electoral college is the probability that they win the pivot state, Arizona or Pennslyvania, which is 63. On the Predictit website, the market-based probability that the Democrats win the presidential election (in the electoral college) is 60, close to 63.

Data collected from Predictit on September 22, 2020

On this date, 19 states had market probabilities on the Predictit website less than 90 percent and greater than 10 percent for the Democrats winning the state. The 19 states, ranked by market probabilities for the Democratic candidate, are:

"sumvotes" is the sum of the electoral votes of all the states ranked above the state plus the state's vote. 270 votes are needed to win. You can see that Arizona is the pivot state. If Biden takes Arizona and all the states ranked above it, he gets 270 votes. Of the states ranked below Arizona, he could also win by not taking Arizona, but taking Pennsylvania, Florida, or North Carolina. This would, of course, violate the ranking assumption.

There is evidence that traders are more or less using the ranking assumption. According to the ranking assumption, the probability that the Democrats get a majority in the electoral college is the probability that they win the pivot state, Arizona, which is 65. On the Predictit website, the market-based probability that the Democrats win the presidential election (in the electoral college) is 59, close to 65.

Data collected from Predictit on October 6, 2020

On this date, 21 states had market probabilities on the Predictit website less than 90 percent and greater than 10 percent for the Democrats winning the state. The 21 states, ranked by market probabilities for the Democratic candidate, are:

"sumvotes" is the sum of the electoral votes of all the states ranked above the state plus the state's vote. 270 votes are needed to win. You can see that Pennsylvania is the pivot state. If Biden takes Pennsylvania and all the states ranked above it, he gets 279 votes. Of the states ranked below Pennsylvania, he could also win by not taking Pennsylvania, but taking Arizona, Florida, or North Carolina, where he is favored. This would, of course, violate the ranking assumption.

According to the ranking assumption, the probability that the Democrats get a majority in the electoral college is the probability that they win the pivot state, Pennsylvania, which is 71. On the Predictit website, the market-based probability that the Democrats win the presidential election (in the electoral college) is 66, slightly below 71. So the market participants are not quite using the ranking assumption.

Data collected from Predictit on October 20, 2020

On this date, 20 states had market probabilities on the Predictit website less than 90 percent and greater than 10 percent for the Democrats winning the state. The 20 states, ranked by market probabilities for the Democratic candidate, are:

"sumvotes" is the sum of the electoral votes of all the states ranked above the state plus the state's vote. 270 votes are needed to win. You can see that Michigan is the pivot state. If Biden takes Michigan and all the states ranked above it, he gets 279 votes. Of the states ranked below Michigan, he could also win by not taking Michigan, but taking Arizona, where he is favored. This would, of course, violate the ranking assumption.

According to the ranking assumption, the probability that the Democrats get a majority in the electoral college is the probability that they win the pivot state, Michigan, which is 67. On the Predictit website, the market-based probability that the Democrats win the presidential election (in the electoral college) is 64, close to 67. So the market participants are roughly using the ranking assumption.

Ranking Assumption for 2020 Senate elections

Data collected from Predictit on September 8, 2020 The current make up of the Senate is 53 Republicans and 47 Democrats, counting the 2 independents as Democrats. Only 14 states are in play in having market probabilities on the Predictit website less than 90 percent and greater than 10 percent. The 14 states ranked by the market probabilities from Predictit for the Democratic candidate are:

state	prob	now
Colorado	88	R
Arizona	87	R
Minnesota	84	D
Michigan	77	D
Maine	72	R	pivot for 50 Democratic seats
North Carolina	67	R	pivot for 51 Democratic seats
Iowa	45	R
Montana	41	R
Georgia, reg.	30	R
Alaska	26	R
South Carolina	23	R
Georgia, spec.	20	R
Texas	13	R
Alabama	11	R

56 = Predictit market-based probability of the Democrats controlling the Senate. If the Democrats win North Carolina and all the states above it, they will have 51 seats, counting the 2 independents as Democrats. If they win Maine and all the states above it but lose North Carolina, they will have 50 seats. They will still control the Senate if they win the White House. According to the ranking assumption, the Predictit market probablility that they control the Senate is thus 72 percent (the probablity they win Maine) if they win the White House and 67 percent (the probablility they win North Carolina) if they don't. If we use the Predictit market-based probabilty of 60 percent that the Democrats win the presidential electon, then the ranking assumption probability that the Democrats control the Senate is 0.60x72 + 0.40x67, which is 70 percent. This is noticeably higher than the Predictit market-based probability of the Democrats controlling the Senate of 56 percent. In this case, unlike in the Presidential case, it does not look like the market is using the ranking assumption. Data collected from Predictit on September 22, 2020 The current make up of the Senate is 53 Republicans and 47 Democrats, counting the 2 independents as Democrats. Only 16 states are in play in having market probabilities on the Predictit website less than 90 percent and greater than 10 percent. The 16 states ranked by the market probabilities from Predictit for the Democratic candidate are:

state	prob	now
Minnesota	87	D
Colorado	84	R
Arizona	83	R
Michigan	73	D
Maine	73	R	pivot for 50 Democratic seats
North Carolina	65	R	pivot for 51 Democratic seats
Iowa	49	R
Montana	42	R
Georgia, reg.	35	R
South Carolina	30	R
Georgia, spec.	27	R
Alaska	26	R
Kansas	22	R
Texas	16	R
Alabama	12	R
Kentucky	11	R

57 = Predictit market-based probability of the Democrats controlling the Senate. If the Democrats win North Carolina and all the states above it, they will have 51 seats, counting the 2 independents as Democrats. If they win Maine and all the states above it but lose North Carolina, they will have 50 seats. They will still control the Senate if they win the White House. According to the ranking assumption, the Predictit market probablility that they control the Senate is thus 73 percent (the probablity they win Maine) if they win the White House and 65 percent (the probablility they win North Carolina) if they don't. If we use the Predictit market-based probabilty of 59 percent that the Democrats win the presidential electon, then the ranking assumption probability that the Democrats control the Senate is 0.59x73 + 0.41x65, which is 70 percent. This is noticeably higher than the Predictit market-based probability of the Democrats controlling the Senate of 57 percent. In this case, unlike in the Presidential case, it does not look like the market is using the ranking assumption. Data collected from Predictit on October 6, 2020 The current make up of the Senate is 53 Republicans and 47 Democrats, counting the 2 independents as Democrats. Only 16 states are in play in having market probabilities on the Predictit website less than 90 percent and greater than 10 percent. The 16 states ranked by the market probabilities from Predictit for the Democratic candidate are:

state	prob	now
Colorado	87	R
Arizona	83	R
Maine	77	R	pivot for 50 Democratic seats
Michigan	71	D
North Carolina	58	R	pivot for 51 Democratic seats
Iowa	54	R
Montana	42	R
Georgia, reg.	38	R
Georgia, spec.	34	R
Alaska	34	R
South Carolina	32	R
Kansas	31	R
Mississippi	19	R
Texas	18	R
Alabama	13	R
Kentucky	11	R

66 = Predictit market-based probability of the Democrats controlling the Senate. If the Democrats win North Carolina and all the states above it, they will have 51 seats, counting the 2 independents as Democrats. If they win Maine and all the states above it but lose North Carolina, they will have 50 seats. They will still control the Senate if they win the White House. According to the ranking assumption, the Predictit market probablility that they control the Senate is thus 77 percent (the probablity they win Maine) if they win the White House and 58 percent (the probablility they win North Carolina) if they don't. If we use the Predictit market-based probabilty of 66 percent that the Democrats win the presidential electon, then the ranking assumption probability that the Democrats control the Senate is 0.66x77 + 0.34x58, which is 70.5 percent. This is somewhat higher than the Predictit market-based probability of the Democrats controlling the Senate of 66 percent. So the market is not quite using the ranking asssumption. Data collected from Predictit on October 20, 2020 The current make up of the Senate is 53 Republicans and 47 Democrats, counting the 2 independents as Democrats. Only 16 states are in play in having market probabilities on the Predictit website less than 90 percent and greater than 10 percent. The 16 states ranked by the market probabilities from Predictit for the Democratic candidate are:

state	prob	now
Minnesota	87	D
Colorado	87	R
Arizona	80	R
Maine	76	R
Michigan	64	D
North Carolina	60	R	pivot for 50 Democratic seats
Iowa	60	R	pivot for 51 Democratic seats
Georgia, spec.	43	R
Montana	37	R
Georgia, reg.	37	R
South Carolina	27	R
Kansas	26	R
Alaska	24	R
Texas	23	R
Mississippi	14	R
Alabama	13	D

65 = Predictit market-based probability of the Democrats controlling the Senate. If the Democrats win Iowa and all the states above it, they will have 51 seats, counting the 2 independents as Democrats, and assuming that they lose Alabama. If they win North Carolina and all the states above it but lose Iowa, they will have 50 seats. They will still control the Senate if they win the White House. According to the ranking assumption, the Predictit market probablility that they control the Senate is thus 60 percent (the probablity they win North Carolina) if they win the White House and also 60 percent (the probablility they win Iowa) if they don't. If we use the Predictit market-based probabilty of 65 percent that the Democrats win the presidential electon, then the ranking assumption probability that the Democrats control the Senate is 0.65x60 + 0.35x60, which is 60 percent. This is slightly smaller than the Predictit market-based probability of the Democrats controlling the Senate of 65 percent. So the market is not quite using the ranking asssumption.