DARPA DESIGNING TERROR MARKET

John Poindexter, the Pentagon divi­sion chief behind the noto­ri­ous Total Information Awareness mega-​​database, is at it again. Now, he’s head­ing up an effort to build a kind of stock mar­ket for ter­ror­ist strikes.
The New York Times reports, “traders bull­ish on a bio­log­i­cal attack on Israel or bear­ish on the chances of a North Korean mis­sile strike would have the oppor­tu­nity to bet on the like­li­hood of such events on a new Internet site” estab­lished by the Defense Advanced Research Projects Agency’s (DARPA) Information Awareness Office.
According to the Associated Press, the Pentagon has requested $3 mil­lion for the Policy Analysis Market for next year and $5 mil­lion for the year after.
THERE’S MORE: “It sounds jaw-​​droppingly cal­lous, not to men­tion absurd,” notes the San Francisco Chronicle. “But experts say the DARPA-​​backed Policy Analysis Market is based on a legit­i­mate the­ory, the Efficient Market Hypothesis, that has a proven track record in pre­dict­ing out­comes.“

Basically, the idea is that the col­lec­tive con­scious­ness is smarter than any sin­gle per­son. By forc­ing peo­ple to put their money where their mouth is, the wagers help weed out know-​​nothings and give more weight to the opin­ions of those in the know.
“Markets are a great way of aggre­gat­ing infor­ma­tion that a lot of dif­fer­ent peo­ple have,” said Eric Zitzewitz, an assis­tant pro­fes­sor of eco­nom­ics at the Stanford Graduate School of Business. “One of the big issues with intel­li­gence that was gath­ered before 9/​11 was that infor­ma­tion wasn’t aggre­gated within the intel­li­gence com­mu­nity. This is directly aimed at address­ing that.” 

Instapundit has more on this.
AND MORE: The Associated Press now says that the Pentagon will “aban­don” the Policy Analysis Market (PAM). Sen. John Warner, the chair­man of the Senate Armed Services Committee, spoke with the program’s direc­tor, “and we mutu­ally agreed that this thing should be stopped,” the AP reports.
AND MORE: The can­celled ter­ror mar­ket project wasn’t the Pentagon’s only exper­i­ment in trad­ing floors that gauge the like­li­hood of world events. Two small firms — Market Technologies Systems (the pro­fes­sors behind the famed Iowa Electronic Markets elec­tion exchange) and Neoteric Technologies — received grants from DARPA to build such oper­a­tions. Two of their trad­ing floors are up on the web, cur­rently: One mar­ket spec­u­lates in home­land secu­rity threat lev­els; the other in the spread of SARS.

July 29th, 2003 | Uncategorized | Comments Off Both comments and pings are currently closed.