Dewey Morning

On election eve, 1948, Thomas Dewey (who, according to polls, was poised to defeat Harry Truman for the presidency) turned to his wife and asked: "How will it be to sleep with the President of the United States?" "A high honor," she replied, "and quite frankly, darling, I'm looking forward to it."

On the following morning, news arrived of the election results: Incredibly, Truman had won! (Polls which canvased opinion by telephone, then a costly amenity, naturally suffered from adverse selection and yielded inaccurate results.)

Eventually, the Deweys sat down for breakfast: "Tell me, Tom," Mrs. Dewey said with a smile, "am I going to Washington or is Harry coming here?"

[Truman's victory was such a surprise that the Chicago Tribune, having printed a premature "DEWEY DEFEATS TRUMAN" headline, was forced to race back to the presses.]

["Decision markets" like Iowa Electronic Markets (which allows speculators to trade 'shares' reflecting a candidate's popularity) and the Hollywood Stock Exchange (which allows people to speculate on box-office returns, opening-weekend performance, and the Oscars) routinely outperform major national polls. Hewlett-Packard has even used such a market to make sales forecasts: Essentially, HP employees bought and sold shares based on their monthly forecasts. Over three years, the markets outperformed the company's official forecasts seventy-five per cent of the time.]

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