Idea futures in Science: a strongly positive review
from the it-works! dept.
In a Feb 9, 2001 item in Science entitled "The Real Power of Artificial Markets" (subscription req'd), it is reported that: "Assessing the probabilities of future events is a problem often faced by science policymakers…At the Foresight Exchange (FX) Web site (http://www.ideosphere.com/), traders can actually bet on the outcomes of unresolved scientific questions…But can we place legitimate credence on the accuracy of FX prices, which are determined solely through competition in a play-money market game? To an extent, yes. We find that FX prices strongly correlate with observed outcome frequencies." Bravo to all at FX and to Robin Hanson, Idea Futures originator. Play for *real* money online at the Foresight Senior Associates idea futures market — just think how accurate it will be. We hope to trade in person at the upcoming Gathering.
February 27th, 2001 at 10:51 AM
Absurd Disruption Scenarios in Ideas Markets
Many of the predictions in the Ideas Futures used at the Foresight Gatherings have the form "Some world-changing event will happen by such-and-such a year." For example, I have seen predictions about when the nation-state will cease to have power or the nanoassembler will arrive utterly changing economics. The absurdity is that to collect on Ideas Futures requires stability. The duty of people to pay me when my contract in the Ideas Futures comes to term is enforced by the nation-state of a stable economy. The fact that these kinds of question are even permitted in Ideas Futures makes it very un-serious. Logically, in any "disruption" scenario, I will always put as much money as possible on the outcome which says that the disruption doesn't happen, because if I'm right, I will collect and if I'm wrong, the disruption will mean there is no institution left to force me to pay up.
February 27th, 2001 at 3:35 PM
summary
The note in Science says the price quotes in idea futures "correlate well" with actual outcomes, where known. That's reassuring. It does not say how well this correlation compares with that for other methods of prediction such as nonmonetary polling, delphic surveys of expert opinion, discussion and debate or direct scholarly study of particular questions.