An options-pricing approach to forecasting the US election
将民调中的得票率估计视为市场价格，用期权定价模型预测非比例制的美国大选，并以2020和2024年选举为例展示方法。
A subjective probability argument suggests vote-share estimates from polls can be interpreted as market prices. The corresponding election constitutes the price at a known future date. This makes an options-pricing approach particularly attractive. The approach works well for proportional systems. Here, we show how to adjust the approach for non-proportional first-past-the-post systems. We illistrate our approach with an application to the most recent 2020 and 2024 elections. • We adapt an options-pricing model of elections to non-proportional systems. • We apply our model to the US presidential election. • Trump starts both 2020 and 2024 campaigns ahead but his lead reduces over time. • In 2020 Biden is ahead from October onwards. • In 2024 Kamala Harris may have benefitted from a longer campaign.