Re: Senators Denounce Policy Analysis Markets
I help run a large non-profit colocation and hosting center for various groups of which an implementation of this would fit perfectly with our mission. If people are interested in trying this in a fully transparent method I am willing to provide our resources and my time to make it happen. Thanks, davidu Seriously - how hard is it to set up such a market? If indeed it can lead to better prediction of violent events, and if it is something that is relatively easy to set up, then why not? Could this be shut down by the Feds? Under what justifications? Fabio Rojas
Re: Senators Denounce Policy Analysis Markets
quote who=fabio guillermo rojas Seriously - how hard is it to set up such a market? If indeed it can lead to better prediction of violent events, and if it is something that is relatively easy to set up, then why not? Could this be shut down by the Feds? Under what justifications? Games, in and of themselves, are not illegal. Even the program setup by the pentagon violated no laws I am aware of...(as if it's possible to know them all...). Again, if others are interested in getting this setup, I'm for it -- then again, it looks like some of the other futures site's on the web have already created DHS,Terrorism and other related sections to their sites so it may be a moot point at this juncture. And if the (US) gov. decided it had a problem with running it, we have limited colocation resources outside of the US for this very reason. As an aside, most of my servers (except email and a few others) drop traffic originiating from DoD or other government registered IP space. Thanks, davidu David A. Ulevitch -- http://david.ulevitch.com http://everydns.net -+- http://communitycolo.net Campus Box 6957 + Washington University in St. Louis
Re: Senators Denounce Policy Analysis Markets
I think you could get into a whole lot of trouble since for any event you predict that happens, if the common opinion is that you have somehow encouraged it, the burden of proof on the civil level will effectively be on you to show that you haven't, which of course will likely be impossible. Also, from questions I asked some of the IEM people a while back, the story goes that most futures markets require heavy regulation, and that they managed to get a no action letter from some agency that guaranteed they would not be hassled with it, since otherwise they could be. The other alternative is to put up your own money prizes for futures, so that you are giving it away creatively, but that doesn't really help with the above problem. I'm sure there must be some people on here that had a hand in the Arizona exchange, and I would be thrilled to hear the story of how they managed that. Quoting fabio guillermo rojas [EMAIL PROTECTED]: I help run a large non-profit colocation and hosting center for various groups of which an implementation of this would fit perfectly with our mission. If people are interested in trying this in a fully transparent method I am willing to provide our resources and my time to make it happen. Thanks, davidu Seriously - how hard is it to set up such a market? If indeed it can lead to better prediction of violent events, and if it is something that is relatively easy to set up, then why not? Could this be shut down by the Feds? Under what justifications? Fabio Rojas
Re: Senators Denounce Policy Analysis Markets
Could this not be an opportunity? Maybe a private sponsor could set up the market? Fabio On Tue, 29 Jul 2003, Robin Hanson wrote: That sure looks like the likely outcome. We never really got a chance to correct misconceptions about the project. (For example, it was never intended to forecast specific terrorist attacks, but only overall trends.) They didn't want to hear. At 01:10 PM 7/29/2003 -0400, [EMAIL PROTECTED]: More likely than not they'll say nothing and the story will quietly go away... conveniently relieving people like reporters and senators from the need to admit they spoke out about something they didn't have much, if any, comprehension of. All of the criticism seems based on the betting on events, not on the use of conditional markets for developing policy. Wonder what they'll say when they figure that bit out FYI, our DARPA project (www.policyanalysismarket.com) has just been denounced by two senators: http://wyden.senate.gov/media/2003/07282003_terrormarket.html Robin Hanson [EMAIL PROTECTED] http://hanson.gmu.edu Assistant Professor of Economics, George Mason University MSN 1D3, Carow Hall, Fairfax VA 22030- 703-993-2326 FAX: 703-993-2323
Re: Senators Denounce Policy Analysis Markets
[EMAIL PROTECTED] (fabio guillermo rojas) writes: Could this not be an opportunity? Maybe a private sponsor could set up the market? Fabio There are nontrivial regulatory costs to doing it privately in the U.S., which probably became a good deal more serious now that politicians are scared of the idea. But the publicity has probably increased the rewards for tradesports.com (located in Ireland) to expand, and for other non-U.S. companies to compete with it. -- -- Peter McCluskey | To announce that there must be no criticism of http://www.rahul.net/pcm | the President, or that we are to stand by the | President right or wrong, is not only unpatriotic | and servile, but morally treasonable to the | American public. - Theodore Roosevelt
Re: Senators Denounce Policy Analysis Markets
quote who=fabio guillermo rojas Could this not be an opportunity? Maybe a private sponsor could set up the market? Fabio Fabio, While I have privately told Robin that I do not support the implementation of the Ideas Futures by the Pentagon, I do believe the concept of Ideas Futures certainly has potential benefits as well as a need for futher implementations. I help run a large non-profit colocation and hosting center for various groups of which an implementation of this would fit perfectly with our mission. If people are interested in trying this in a fully transparent method I am willing to provide our resources and my time to make it happen. Thanks, davidu David A. Ulevitch -- http://david.ulevitch.com http://everydns.net -+- http://communitycolo.net Campus Box 6957 + Washington University in St. Louis
Re: Senators Denounce Policy Analysis Markets
The NYT article on this Pentagon Prepares a Futures Market on Terror Attacks By CARL HULSE ASHINGTON, July 28 The Pentagon office that proposed spying electronically on Americans to monitor potential terrorists has a new experiment. It is an online futures trading market, disclosed today by critics, in which anonymous speculators would bet on forecasting terrorist attacks, assassinations and coups. Traders bullish on a biological attack on Israel or bearish on the chances of a North Korean missile strike would have the opportunity to bet on the likelihood of such events on a new Internet site established by the Defense Advanced Research Projects Agency. The Pentagon called its latest idea a new way of predicting events and part of its search for the broadest possible set of new ways to prevent terrorist attacks. Two Democratic senators who reported the plan called it morally repugnant and grotesque. The senators said the program fell under the control of Adm. John M. Poindexter, President Ronald Reagan's national security adviser. One of the two senators, Byron L. Dorgan of North Dakota, said the idea seemed so preposterous that he had trouble persuading people it was not a hoax. Can you imagine, Mr. Dorgan asked, if another country set up a betting parlor so that people could go in and is sponsored by the government itself people could go in and bet on the assassination of an American political figure? After Mr. Dorgan and his fellow critic, Ron Wyden of Oregon, spoke out, the Pentagon sought to play down the importance of a program for which the Bush administration has sought $8 million through 2005. The White House also altered the Web site so that the potential events to be considered by the market that were visible earlier in the day at www.policyanalysismarket.org could no longer be seen. But by that time, Republican officials in the Senate were privately shaking their heads over the planned trading. One top aide said he hoped that the Pentagon had a good explanation for it. The Pentagon, in defending the program, said such futures trading had proven effective in predicting other events like oil prices, elections and movie ticket sales. Research indicates that markets are extremely efficient, effective and timely aggregators of dispersed and even hidden information, the Defense Department said in a statement. Futures markets have proven themselves to be good at predicting such things as elections results; they are often better than expert opinions. According to descriptions given to Congress, available at the Web site and provided by the two senators, traders who register would deposit money into an account similar to a stock account and win or lose money based on predicting events. For instance, Mr. Wyden said, you may think early on that Prime Minister X is going to be assassinated. So you buy the futures contracts for 5 cents each. As more people begin to think the person's going to be assassinated, the cost of the contract could go up, to 50 cents. The payoff if he's assassinated is $1 per future. So if it comes to pass, and those who bought at 5 cents make 95 cents. Those who bought at 50 cents make 50 cents. The senators also suggested that terrorists could participate because the traders' identities will be unknown. This appears to encourage terrorists to participate, either to profit from their terrorist activities or to bet against them in order to mislead U.S. intelligence authorities, they said in a letter to Admiral Poindexter, the director of the Terrorism Information Awareness Office, which the opponents said had developed the idea. The initiative, called the Policy Analysis Market, is to begin registering up to 1,000 traders on Friday. It is the latest problem for the advanced projects agency, or Darpa, a Pentagon unit that has run into controversy for the Terrorism Information Office. Admiral Poindexter once described a sweeping electronic surveillance plan as a way of forestalling terrorism by tapping into computer databases to collect medical, travel, credit and financial records. Worried about the reach of the program, Congress this year prohibited what was called the Total Information Awareness program from being used against Americans. Its name was changed to the Terrorism Information Awareness program. This month, the Senate agreed to block all spending on the program. The House did not. Mr. Wyden said he hoped that the new disclosure about the trading program would be the death blow for Admiral Poindexter's plan. The Pentagon did not provide details of the program like how much money participants would have to deposit in accounts. Trading is to begin on Oct. 1, with the number of participants initially limited to 1,000 and possibly expanding to 10,000 by Jan. 1. Involvement in this group prediction process should prove engaging and may prove profitable, the Web site said. The overview of the plan
Re: Senators Denounce Policy Analysis Markets
In a message dated 7/29/03 4:05:03 AM, [EMAIL PROTECTED] writes: The Pentagon office that proposed spying electronically on Americans to monitor potential terrorists has a new experiment. This is typical of the statist-liberal news media--starting a news article with an ad homenim attack. DBL
RE: Senators Denounce Policy Analysis Markets
This story has even made it to Technology news site Slashdot (www.slashdot.org) http://slashdot.org/article.pl?sid=03/07/29/1249247mode=threadtid=126tid= 95 Perhaps you'd like to contribute to the discussion there to fight against the prevailing negative mood. Hamish -Original Message- From: Robin Hanson [mailto:[EMAIL PROTECTED] Sent: Monday, July 28, 2003 8:56 PM To: [EMAIL PROTECTED]; [EMAIL PROTECTED] Subject: Senators Denounce Policy Analysis Markets FYI, our DARPA project (www.policyanalysismarket.com) has just been denounced by two senators: http://wyden.senate.gov/media/2003/07282003_terrormarket.html Robin Hanson [EMAIL PROTECTED] http://hanson.gmu.edu Assistant Professor of Economics, George Mason University MSN 1D3, Carow Hall, Fairfax VA 22030- 703-993-2326 FAX: 703-993-2323
Re: Senators Denounce Policy Analysis Markets
Glenn Reynolds (Instapundit) blogged about the DARPA project controversy: THE PENTAGON WANTS TO USE A FUTURES MARKET http://nytimes.com/2003/07/29/politics/29TERR.html to predict terror attacks. Although this is getting a lot of criticism (mostly from members of Congress who, I suspect, couldn't accurately describe the operation of /existing/ futures markets) I think it's an excellent example of creative thinking, and the Pentagon deserves to be congratulated for it. As I've suggested before (here http://www.techcentralstation.com/1051/defensewrapper.jsp?PID=1051-350CID=1051-041603A, here, http://www.techcentralstation.com/1051/defensewrapper.jsp?PID=1051-350CID=1051-021203A and especially here http://techcentralstation.com/1051/techwrapper.jsp?PID=1051-250CID=1051-103002A) the diffuse, fast-moving threat of terrorism requires a diffuse, fast-moving response. And this sounds like a very plausible way of recruiting a lot of minds in the service of anti-terrorism. Josh Chafetz agrees: http://www.oxblog.blogspot.com/2003_07_27_oxblog_archive.html#105943317047655345 A futures market in terrorist attacks, while it sounds grisly, may help us to aggregate diffuse knowledge in a way that will prove superior to expert knowledge. It also may not, but it seems to me that it's worth a try. At the very least, if we're going to demand that the government get creative in fighting terror, we shouldn't be so quick to criticize when it does just that. Yep. UPDATE: Reader Fred Butzen emails: The story about the Pentgon's terrorism market clearly is an extension of Iowa Electronic Markets, which has been run for years by the University of Iowa's Tippett School of Business. Here's a link to the Iowa Information Market's web site: Link http://www.biz.uiowa.edu/iem/ In brief, the IEM lets persons place bets on the likelihood of given events' happening; for example, people could bet on the likelihood that Saddam Hussein will survive this year, or who will win the next presidential election. The collective expertise of the participants has proven to be extremely useful in predicting events. The notion that the dim-bulbs in Congress and the media should attack such a useful and proven idea as the Pentagon's is utterly absurd. This is absolutely right. Whether or not the Pentagon's idea is a good one depends on details I don't know about. But the lame criticism makes clear that the critics are -- as usual -- clueless on the subject. ANOTHER UPDATE: Mitch Berg points out http://www.mitchberg.com/shotindark/2003_07_01_archive.html#105948759942593174 that this approach has worked in the past. posted at 08:44 AM by *Glenn Reynolds* http://www.instapundit.com/archives/010668.php Robin Hanson wrote: FYI, our DARPA project (www.policyanalysismarket.com) has just been denounced by two senators: http://wyden.senate.gov/media/2003/07282003_terrormarket.html Robin Hanson [EMAIL PROTECTED] http://hanson.gmu.edu Assistant Professor of Economics, George Mason University MSN 1D3, Carow Hall, Fairfax VA 22030- 703-993-2326 FAX: 703-993-2323
Re: Senators Denounce Policy Analysis Markets
All of the criticism seems based on the betting on events, not on the use of conditional markets for developing policy. Wonder what they'll say when they figure that bit out On Mon, 28 Jul 2003, Robin Hanson wrote: FYI, our DARPA project (www.policyanalysismarket.com) has just been denounced by two senators: http://wyden.senate.gov/media/2003/07282003_terrormarket.html Robin Hanson [EMAIL PROTECTED] http://hanson.gmu.edu Assistant Professor of Economics, George Mason University MSN 1D3, Carow Hall, Fairfax VA 22030- 703-993-2326 FAX: 703-993-2323
Re: Senators Denounce Policy Analysis Markets
On Tue, 29 Jul 2003, Jeffrey Rous wrote: I seem to remember looking at the Iowa Electronic Market right before the 2000 election and noticing that it had Gore winning the winner-take-all and Bush getting a higher percentage of the vote. And I remember thinking that this was just an indication of how close the race really was. Am I remembering this correctly. Yes, that is correct. I remember making the same observation. I think the Iowa markets seem to do better than most pundits. Fabio
Re: Senators Denounce Policy Analysis Markets
More likely than not they'll say nothing and the story will quietly go away... conveniently relieving people like reporters and senators from the need to admit they spoke out about something they didn't have much, if any, comprehension of. All of the criticism seems based on the betting on events, not on the use of conditional markets for developing policy. Wonder what they'll say when they figure that bit out On Mon, 28 Jul 2003, Robin Hanson wrote: FYI, our DARPA project (www.policyanalysismarket.com) has just been denounced by two senators: http://wyden.senate.gov/media/2003/07282003_terrormarket.html Robin Hanson [EMAIL PROTECTED] http://hanson.gmu.edu Assistant Professor of Economics, George Mason University MSN 1D3, Carow Hall, Fairfax VA 22030- 703-993-2326 FAX: 703-993-2323
Re: Senators Denounce Policy Analysis Markets
On 2003-07-28, Robin Hanson uttered: FYI, our DARPA project (www.policyanalysismarket.com) has just been denounced by two senators: http://wyden.senate.gov/media/2003/07282003_terrormarket.html It's still a nice plan. Much like Brunner's delphi pools in Shockwave Rider. (BTW, if anybody ever tried to patent artificial markets like these, it'd be highly interesting to know whether sufficiently exacting scifi qualifies as prior art.) What I'm wondering, though, is asymmetric information. General contingent markets are basically complicated markets in risk, and the claims traded a form of insurance based on risk sharing. So the same problems apply to them that do to insurance. If we're betting on diffuse, difficult to influence risks, there's no problem. But if we bet on something individual market participants can change, we have to consider things like moral hazard and adverse selection. I mean, because of the efficient market hypothesis, the ideal contingent market only allows profits to someone bringing in new information. That's why betting on whether someone will be assassinated will give an unreasonable edge in information to an assassin, and will actually spawn assassinations. (Assassinations are probably cheaper than defending against them if true anonymity is present.) That's also why the market could turn into a twisted incarnation of Assassination Politics (http://jya.com/ap.htm). Furthermore -- unlike the original AP proposal -- these are futures markets where you can speculate and win without pulling the trigger. Rational bubbles can form, and those will in case turn the bet on an assassination into a self-fulfilling prophecy (early investors will have an incentive to rig the wheel, so to speak). When this happens, the ill effects of moral hazard will be amplified, and we can't rely on the resulting assassinations being reasonable even to the degree we can with garden variety AP. To someone with a penchant for conspiracy theories, then, all this would probably count as one of DARPA's tacit aims. -- Sampo Syreeni, aka decoy - mailto:[EMAIL PROTECTED], tel:+358-50-5756111 student/math+cs/helsinki university, http://www.iki.fi/~decoy/front openpgp: 050985C2/025E D175 ABE5 027C 9494 EEB0 E090 8BA9 0509 85C2
Re: Senators Denounce Policy Analysis Markets
I've been raring to go with the pam markets for a while now -- condolences. Many people here are probably aware of it, but you can also check out (and participate in!) the Iowa Electronic Markets online at the University of Iowa, http://www.biz.uiowa.edu/iem/ which have a reasonable track record for political markets -- perhaps you can petition them to run a market for Arnold in CA. At 02:56 PM 7/28/2003 -0400, you wrote: FYI, our DARPA project (www.policyanalysismarket.com) has just been denounced by two senators: http://wyden.senate.gov/media/2003/07282003_terrormarket.html Robin Hanson [EMAIL PROTECTED] http://hanson.gmu.edu Assistant Professor of Economics, George Mason University MSN 1D3, Carow Hall, Fairfax VA 22030- 703-993-2326 FAX: 703-993-2323
