August 2, 2003 | Sydney Morning HeraldA story about the Pentagon's plans to create a futures trading market for speculative trading on events in the Middle East, a plan that was scrapped Tuesday, says the site was based on the IOWA ELECTRONIC MARKET, a real-money futures exchange at the UNIVERSITY OF IOWA BUSINESS SCHOOL, which beat the nine major polling groups in predicting the outcome of the past four presidential elections. The traders tend to be wealthy, well-educated young men, about 30 years old. Its accuracy is said to spring from the fact that people are motivated by money to get it right. Last year, four of the professors involved in the IEM formed a company to capitalize on their research. A 2002 Iowa University press release claimed they planned to develop markets for the Defense Department and other agencies to predict events such as when the development of ships or aircraft will be finished: "Markets could also be set up to predict outcomes of political events with defense implications, such as elections in volatile regions or when a peace accord between Israel and Palestine might be signed."
Contact: Robert Forsythe