Prediction Markets and Political Interest: The Votanding Experience

• In Event: Explaining and Mitigating Voting Behavior Gaps

Abstract

The phenomenon of declining political engagement among youth has received significant attention, yet limited scholarly focus has been directed toward developing regions. This paper investigates the potential efficacy of prediction markets as a tool to incentivize young voters to engage in political activities. Specifically, we examine the practice of placing bets on predictions of mayoral candidate vote distributions in Bogotá's elections within a prominent Colombian university. Employing a field experiment, participants are randomly assigned to pay for their bets or receive subsidies, with an additional examination of the impact of updating predictions. Contrary to initial hypotheses, subsidizing the bet emerges as a significant factor in increasing participants' interest in the election and reducing prediction errors. As anticipated, updates to predictions also contribute to a reduction in individual prediction errors. While no significant effects on voter turnout are detected, subgroup analyses reveal nuanced responses, with men displaying heightened interest in politics and decreased prediction errors under both treatments. All in all, our findings shed light on the potential of prediction markets to stimulate political engagement among young voters, providing valuable insights for future research and policy considerations in fostering civic participation.

Authors

• Carolina Bernal, Columbia University

• Mateo Villamizar Chaparro, Universidad Católica de Uruguay

• Mónica Pachón, University of Los Andes