They’ve pulled it already

That was quick… The BBC link in the story below now goes to the ‘Pentagon axes online terror bets’ story. Luckily I still have the text of the original:


The Pentagon is planning to set up an online trading market in which
bets could be made about future terrorist attacks and other major
political developments.

The idea is to try to improve the prediction and prevention of events by
using the expertise of the open market instead of relying on government
agencies which have often failed in the past.

One example used on the website set up for the programme is the possible
overthrow of King Abdullah of Jordan.

Castro, who the CIA has failed to kill in the past, could be worth a bet

But the plan has already run into fierce opposition in the US Congress.

Senators Ron Wyden of Oregon and Byron Dorgan of North Dakota, both
Democrats, have written to the Pentagon urging it to abandon the idea.

“The idea of a federal betting parlour on atrocities and terrorism is
ridiculous and it’s grotesque,” said Senator Wyden.

Senator Dorgan said that it was “useless, offensive and unbelievably
stupid”. He said he had trouble in persuading other people that it was
not a hoax.

“How would you feel if you were the King of Jordan and you learned that
the US Defence Department was taking bets on your being overthrown
within a year?” he asked.

Market vision

The US Defence Department defended the initiative and compared the
proposed market to those predicting the price of petroleum, the results
of elections and even the demand for cinema tickets.

“Research indicates that markets are extremely efficient, effective and
timely aggregators of dispersed and even hidden information,” it said in
a statement.

Markets have done this in economics for some time and the Iowa
Electronic Markets does it for US presidential elections, so it is not
really novel

The scheme is called the Policy Analysis Market (PAM) and it is run by a
Pentagon unit known as the Defence Advanced Research Projects Unit.

This is under the control of retired Admiral John Poindexter who has
been involved in another controversy recently in a plan for a sweeping
electronic intelligence operation.

The market would work by getting traders to deposit money in an account
and using that to buy and sell contracts. They would make their money if a particular event actually happened.

Invitations have gone out online for an initial 1,000 traders to
register on 1 August and the programme is designed to start on 1
October.

Cost effective insight

Senator Wyden explained the system by saying: “You may think early on
that Prime Minister X is going to be assassinated. So you buy the
futures contracts for 5 cents each.

“The payoff if he is assassinated is $1 per futures. So if it comes to
pass, those who bought at 5 cents make 95 cents and those who bought at
50 cents make 50 cents.”

One of the organisations providing data for the project is the Economist
Intelligence Unit in London.

Its Director of Risk Services, Merli Baroudi, told News Online: “It is
trying to gather insights of people in a cost effective way. Markets
have done this in economics for some time and the Iowa Electronic
Markets does it for US presidential elections, so it is not really
novel.”

The website set up by PAM says that “it should prove as engaging as it
is informative”.