Neumann Comments on Information Markets
Bookmark & ShareJuly 30, 2003
The Pentagon has killed a controversial program to create a futures market for predicting political events and terrorist acts in the Middle East. The Defense Advanced Research Projects Agency had developed the idea as a potential tool for gauging political risks, but just about everyone in Washington turned their backs on the program once it was publicized. The program would have allowed traders to buy contracts on future events in eight Middle Eastern Countries just the way commodities traders bet on the future price of pork bellies. The Concept of information markets is a popular one among economists. GEORGE NEUMANN teaches economics at the University of Iowa and he loves the idea. "There's a need for more information markets in the U.S rather than less." Neumann is involved in the IOWA ELECTRONIC MARKETS, which claims to have a pretty good track record for predicting electoral results. Up until Congress killed the DARPA project on Tuesday, Neumann had been working as a contractor on that effort. He says businesses use information markets all the time to weigh opinions and plan for the future. He says it's basically a refined form of polling. "In polls, everyone is always trying to get a random sample. The last thing we want is a random sample. We want the best and the brightest traders." Neumann says the whole idea was attacked before anyone understood what was planned. This segment aired on Morning Edition.
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