MIT, Yale start White House futures market

[Bob McDob]

http://www.wired.com/news/politics/0,1283,59879,00.html

Though there was an outcry over the Pentagon's terrorism futures market, a similar online exchange is in the works to predict what the U.S. government is up to.

The American Action Market will offer various Washington "futures" that can be bet upon and traded. Examples include:

•Who will be the next foreign leader to move off the CIA payroll and onto the White House's "most wanted" list?


•Which corporation with close ties to the White House will be the next cloaked in scandal?

The AAM will begin registering traders in September and plans to open for business Oct. 1 -- the same launch date proposed for the Pentagon's terrorism market, until it was shelved.

Like the Pentagon's scrapped Policy Analysis Market, the AAM lets traders "bet" on future events by buying and selling futures as though they were stocks. The higher the price, the more likely the market believes the event will occur. But instead of predicting terrorist strikes, the AAM will predict things like the next White House staffer to quit.

"The idea is to answer some of the most pressing questions in the world: What will the White House do next?" said one of the founders, Andrew Geiger, an American programmer living in Paris.

The AAM market is the brainchild of a half-dozen academics from various colleges, including the Massachusetts Institute of Technology, Yale University, New York University and the University of Montreal. Most, however, are keeping their identities quiet until they get an institutional go-ahead.

The market was organized on Nettime, a politics and culture mailing list.

"It's quite amazing, the Pentagon and the White House are very fertile imaginative fields these days," Geiger said. "(The AAM project) sounds humorous, but that just shows how far things have gone. We've entered the realm of fiction. Things really are Dr. Strangelove."

The AAM project complements another academic project, the Government Information Awareness project. The GIA was built in response to the Defense Advanced Research Projects Agency's Terrorism Information Awareness program.

Its organizers hope the market will attract academics, politicians, civil servants and other insiders to provide accurate predictions of White House behavior. Geiger said even those who read the newspapers are qualified to be traders.

"Our goal is to have people with insight into how the White House works," said Geiger. "There are a lot of people who spend a lot of time thinking about what's going on in the world these days. A lot of that thought could be transferred into the system, giving you trading data that will tell you what's really going on."

Geiger added, "Who knows whether it will reveal stuff? Anyway, it will be engaging."

The public, he noted, will be able to follow trades on the market's website.

David Pennock, a senior research scientist at Overture Services, said futures markets have proven to be very good predictors of many different kinds of events, from the weather to election outcomes.

"It's one of the best, if not the best, way to predict the future," he said. "It's a good, well-known method for getting information that's distributed around the world."

Bob Forsythe, a University of Iowa professor who helped organize the Iowa Electronic Markets, which speculate on election results, agreed that futures are reliable indicators of what's going to happen next -- if the traders are knowledgeable.

"You have to have informed traders or they don't work very well," he said. "Who are the informed traders in an assassination market, for example? The same's true for predicting the White House."

[Howedar]

Beautiful delicious irony.


Well maybe its not precisely irony, but its still awesome.

[The Duchess of Zeon]

Beautiful delicious irony.


Well maybe its not precisely irony, but its still awesome.

These sorts of things are actually pretty common.

[phongn]

They apparently work decently too.