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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.
What's to stop this from becoming real? Why can't I bet on things like this in Vegas or Atlantic City?
moo.
"Will Duke Nukem Forever be released? Ever?"
[ ] yes
[ ] no
what's the over/under on the amount of time until emacs becomes self-aware?
No betting on when a time machine will be invented. Because the person who guesses when, is probably the bastard that did invent it.
If this post didn't make your head spin on your shoulders and implode, then you have a better temproral mind than I.
Saskboy's blog is good. 9 out of 10 dentists agree.
2. Bet half one way, half the other. Discard the half that loses.
3. n--
4. If n>0, goto step 2.
5. Profit!!!
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.
It looks a lot like Long Bets, which has been around for quite some time. It was launched as a spin-off of Danny Hillis's Long Now Foundation. Other interesting projects of theirs include the Rosetta Project and the 10,000 year clock.
siener's youtube channel
An amusing idea. Supposedly one can get a correct answer to an unknowable question, simply by polling enough people with enough knowledge of the subject to have an opinion. I loved Brunner's description of it:
"Even though nobody knows what's going on around here, everybody knows what's going on around here."
The Iowa Electronic Markets at the University of Iowa has had this for a long time. And it does use real money, and is fully legal.
I'd like to paraphrase that into "Nobody knows what's going on around here, but everybody has an opinion".
Just look at the audience votes in Who wants to be a millionaire. I saw some screenshots from the German version where this lady was asked what George W. Bush's first name was (THE FULL NAME WAS *IN* *THE* *QUESTION*!) and first she used the 50-50 lifeline to eliminate all options except George and Edward. Then she asked the audience and not only did the majority of the idiots vote Edward, 3% of them actually voted for an already eliminated option (Gertrude or something, I don't remember). She gave Edward as her final answer.
Money for nothing, pix for free
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Not only did we cause their server to go off-line, we caused them to start spelling wrong, too! Now just wait until they re-launch the same service tomorrow, pretending they haven't noticed it's a dupe...
Money for nothing, pix for free
Oh come on, you're misrepresenting and oversimplifying the issues and you know it.
/. first (yada yada, insert "you must be new here" and get +5 funny for it... I'm just too lazy to create an account, but if I did, you would get modded down hardcore-style)
The terrorist futures market (your "U.S.A" futures market) was to allow people to bet real money on when/where the next terrorist attack was going to occur. This creates an incentive for those trading in those futures to help make sure the attacks happen so as to cash in on their investment. People would literally be betting on other peoples' lives; a rather morbid idea, don't you think? Especially considering that the terrorists themselves could (if the program were expanded to allow more than just select govn't individuals) bet on their own plans.
MIT's futures market is not betting on human life, and for that matter, does not even involve real money. You might as well be playing Monopoly; the real value gained from participating is the same (except that with the MIT futures market, you might see cool new stuff developed as a result of the interest of people who think it likely that a given idea will come to fruition).
One market bets on life, using real money. The other bets on ideas/concepts, using fake money.
Look, I'm a seriously tax-hating, free-market loving, communist-hating "economics-drives-everything" libertarian, and still I oppose(d) the terrorist futures market on the grounds that it creates financial incentive to end human life.
I read a report in some business magazine (Fortune? Forbes?) about the creator of that market - a PhD economics professor. His intentions were excellent, but the problem is that he is so far out of the loop from the rest of society that he didn't realize that people would find such a market morally-repugnant.
"Get it straight"? Speak for yourself. Get your issues straight before committing them to
Possible, but unlikely. Money laundering schemes normally work by routing "dirty" money through a "clean" operation with a small cut being taken by whoever's doing the washing. You'd want to make sure that you're money isn't at any more risk than normal, and the stock market would inject too much risk into the transaction. Not to mention that huge bidirectional trades of stock in a short time can cause the SEC to blink.
Far better to have a legitimate shell corporation hire the DEA agent for "security consultations" for some exorbanant hourly fee and move the money that way.
At least, that's how the whole laundering thing was explained to me. I'm not an accountant, I just write their software...
There's so little difference between politics and jihad lately...
From what you say, it sounds as though this kind of thing is much less common in the US than in Britain (where I am). Here in the UK, where gambling is much more legally, and socially, acceptable, bookies (high street gambling shops) take bets on most things that can be bet on. Huge amounts of money change hands during the general elections. And in political reporting, for example with the recent leadership challenge to the leader of the opposition, it's very common for the reporters to quote the odds given to various outcomes by the big bookies.
Other non-sports bets include:
Celebrity and royal marriages / breakups.
The Booker Prize (a bit like your national book award, I think)
Outcomes of television programmes such as Big Brother
The weather on Christmas day (snow / not snow).
I even heard a science programme about SETI on the radio where they got a big bookie to give odds on the discovery of alien intelligence.
evil math within Nature's Cubic Creation!
The way this works on FX is this: You want to move money from player A to player B. You find a thinly traded claim, say currently trading at a price of 50. Player A offers to sell a bunch at 20. Immediately, most of the other orders on the board will execute, but you picked a thinly traded claim, so they should represent a relatively small fraction of the ammount you wished to move. Now there is a big offer to sell on the board for 20, which player B scoops up. Then the process is reversed, with player A offering to buy at 70. Player B then unloads the claims he bought at 20 for 70 to player A. There are a lot of variations on this theme with multiple accounts and such, that you could think up.
In the stock market, it's a lot harder to do this type of thing, because of several factors. First, there aren't any stocks that are as thinly traded as the thinnest claims on FX. Second, even if you pick the smallest stock off the pink sheets, you will be dealing with a broker. If you offer to buy at a very high price or sell at a very low one, the broker may just execute the transaction for himself, or with another market maker. If you execute on an ECN, someone else may snag the trade before you have a chance to yourself. Furthermore, in its pure form, you need to be able to sell short. You usually can't do this on a penny stock. Furthermore, these transactions are logged, and this type of transaction would be likely to arouse suspicion if you were way out of line with the market. Therefore, it would be tough to do this with good efficiency, because the other traders and commissions would eat into the money you were trying to transfer.
Becomes a whole lot easier. Imagine the corruption! This stuff is a lot LESS random than sports events, which can be 'thrown' are a lot easier to spot as frauds.
I'm just waiting for the disgruntled engineer to whisper to his cousin to place his money on the new Intel Hypertanic chip to be released in Q4. Then flee with the millions reaped. Puh-leez, this ==lame idea;
One core assumption of these types of trading markets is that the price of the item is tied to some objective value. In an ideas market, the price should reflect the probability that the stated idea or proposition will be true. Under this assumption, people could use the price of the idea as a proxy for the probability that the idea is true (and make product development or VC decisions with the information).
But some traders act not on the intrinsic value of the item underlying the tradable instrument, they act on the movement of the price. Thus they might buy in on a idea, not because it is undervalued, but because they think the price will go up. Such speculators profit from short-term trades. Called momentum trading, it is a good way to create a bubble in the price that has nothing to do with the true value of the idea or probability that the idea will come to pass.
Markets like this ideas market and the stock market tend to reflect both rational economic facts and human subjective thought patterns. The problem is that one can never tell when the price represents reality or a mass dillusion.
Two wrongs don't make a right, but three lefts do.
still I oppose(d) the terrorist futures market on the grounds that it creates financial incentive to end human life.
That was really stupid. You can't be a libertarian if you allow your emotions to overcome your intelligence so quickly. I mean, I understand perfectly, why some people would be up in arms about the "terrorism market" (because they are idiots), but the arguments simply do not hold water. Whatever financial incentive there might be to commit the act, do you honestly believe that it can be in any way comparable to the risks and the expected value of losses? I mean, what sane person would do a terrorist act for a few thousand dollars? And you can't win more, because what would FBI think when you bet 1 million $ on a terrorist act and it happens? You call that incentive to commit the act, I call it incentive to disclose the information about it.
Nobody said (except for conservative wackos like yourself) that participants will be rewarded for successful terrorist acts and not for those that are prevented. What makes you think that the exchange would not reward people for successful predictions that would have resulted in a prevented terrorist act.
Future Wiki -- If you don't think about the future, you cannot have one.