Technology Review Launches Futures Market

prostoalex writes "MIT Technology Review launched a futures market, allowing people to bet on ideas. A similar concept was at some point introduced by the Pentagon, but later the project was shut down. Currently you can bet on major stock indices, on answers to yes/no questions ('Will Oracle acquire PeopleSoft Inc before March 31st, 2004?') and technological achievements ('When will there be a commercially available electronic device using ultrawideband technology?')" Although the game doesn't use real money, the prizes are pretty swell. I like to think of it as the nerd's version of sportsbook.

Comments

Re:Whats to stop this

[evanbd]

basically, you have to either run it as a gambling operation or as a securities exchange. As a gambling operation, you can't run it across state lines, so you have to go out of the country. There are a couple such; tradesports.com is the biggest, iirc. If you want to make it an actual exchange, that costs $1M to the SEC. This has so far been prohibitive. The other thing of note is the Iowa Electronic Markets, run by U of Iowa, which bet on the presidential elections. They have special permission from the SEC as a research institution, but are highly limited in what they can trade, who can trade, and how much. So, in short, it's hard to do in the US, but there are places doing it.

Also of note is Foresight Exchange, a long-established play money market. It seems a lot of people are interested in it being real, but unfortunately it seems difficult at present (and the few there are charge high comissions).

Foresight Exchange has been doing this for years

[SiliconEntity]

The Foresight Exchange online game has been doing this since 1994. It was invented by economist Robin Hanson, who was also the mastermind behind the ill fated Pentagon effort.

One of the big problems with these "funny money" based games is the possibility of cheating. Sine it doesn't cost anything to register, you can create as many accounts as you want, for free. What you do is create multiple accounts under different names, and arrange to funnel money from one account to another. You have one account make bad trades so it loses money, which then goes into the other accounts, building up their scores. Since this MIT game is offering valuable prizes, they can expect problems with this kind of cheating.