Gokken op terrorisme
Dinsdag (29 juli 2003) werd aangekondigd dat de Amerikaanse overheid bezig is een termijnmarket voor sociale en politieke gebeurtenissen op te zetten. Daarmee zou als het ware gegokt kunnen worden op met name politieke gebeurtenissen in het Midden-Oosten. Echter, nog dezelfde dag werd het hele project teruggetrokken, na zware kritieken van onder andere de Democratische Partij.
Ze gingen ervan uit dat de prijzen van deze contracten een nuttige indicatie zouden zijn voor de kans op toekomstige gebeurtenissen, zoals terroristische aanslagen, zodat men daar beter rekening mee kan houden of maatregelen treffen. De nu lege website van het project gaf eerder nog informatie over de plannen, met een aankondiging dat handel later dit jaar zou beginnen. In de cache van Google is de oude informatie nog te lezen. Critici zeiden dat het een ziek idee was en dat het een belediging voor buitenlandse politici zou zijn als er gegokt zou kunnen worden op een aanslag op hun leven. Bovendien wezen ze erop dat dit systeem juist terrorisme zou kunnen stimuleren, door het financieel te belonen. Terroristen zouden immers kunnen gokken op een aanslag, en dan geld verdienen door zelf de aanslag uit te voeren.
Het idee lijkt op dat van de politieke aandelenmarkt van de Volkskrant. Het idee van dit soort markten, is dat de markt vaak veel beter is in het voorspellen van de kans op sociale of politieke gebeurtenissen dan een enkele expert of een peiling. Volgens de achterliggende theorie coördineert de markt als het ware de expertise van allerlei experts met verschillende inzichten en geeft zo het beste resultaat. Als de marktwaarde van een termijncontract, waarbij je $1 krijgt uitbetaald als Saddam Hoessein binnen een jaar gevonden wordt, bijvoorbeeld $0.35 is, dan betekent dat dat de kans dat dat gebeurt volgens de markt ongeveer 35% is.
Hoewel er zoals gezegd ook gevaren zijn aan zo'n systeem (het financieel belonen van terrorisme), zitten er ook voordelen aan (het helpen bij het voorspellen van gebeurtenissen). De Amerikaan Jim Bell bedacht in 1995 zelfs al een variant op dit systeem waarbij het juist de bedoeling was om aanslagen op kwaadaardige politici te stimuleren door ze financieel te belonen via een anoniem goksysteem. Bell werd overigens veroordeeld tot 10 jaar gevangenisstraf voor het stalken van een federale agent die hem aan het onderzoeken was.
Het zou wellicht aardig zijn als de vrije markt het initiatief van de Amerikaanse overheid overneemt, ook al zijn ze er zelf mee gestopt. Hoewel er natuurlijk een kans is dat de overheid gaat verbieden wat ze eerst zelf van plan waren.
Henry Sturman
Gerelateerde links:
- Pentagon schrapt goksite na kritiek
- Politieke Aandelenmarkt
- Gokken op de Toekomst
- Assassination Politics
- Assassination Politics (Jim Bell's oorspronkelijke essay)
Plaats reactie - 4 reactie(s):
30-jul-2003 Aschwin de Wolf
Ik heb redelijk de discussie over dit voorstel gevolgd in de VS en het niveau ervan was angstaanjagend laag (politici niet uitgezonderd).
Als gevolg van het populistische argument dat je geen geld dient te verdienen aan het lijden van anderen wordt een mogelijk(!) interessant idee, met succesvolle applicaties op andere gebieden, zonder serieuze analyse volledig de grond in geboord.
30-jul-2003 Aschwin de Wolf
Vandaag op Tech Central Station:
Futures Shock
By James Pethokoukis 07/30/2003
You would think that if any member of the Senate Armed Services Committee understood a thing or two about futures markets, it would be the Cattle Queen of Arkansas, Hillary Rodham Clinton. Not only did Clinton display Soros-esque market timing during her days as a futures speculator, but she's a native of Chicago, home of the Chicago Board of Trade and the Chicago Mercantile Exchange. (It was the Merc where she famously turned $10,000 into $100,000 on cattle futures.) But the junior senator from New York was derisively dramatic when she described the Pentagon's proposed futures market for predicting terrorist strikes as a "futures market in death" as if it were a financial version of the death match in Stephen King's Running Man.
But Clinton was hardly alone on the panel in her apoplectic criticism. Senate Democratic Leader Tom Daschle denounced the trial program sponsored by the Defense Advanced Projects Agency as "an incentive to actually commit acts of terrorism." Clinton and Daschle's Senate counterparts in the GOP -- the party with the reputation of having greater faith the wisdom of markets -- saw a political Perfect Storm brewing and quickly put the kabosh on the Policy Analysis Market project which was supposed to start signing up potential traders on August 1 and be up and running on October 1.
This is just the sort of nightmare that George Mason University professor Robin Hanson fretted about when he first proposed the idea for PAM to the DARPA. "My suggestion was to go for the big time, but my wariness with these sorts of things is that the bigger thing you go for, the more you risk stepping on someone's toes or offending someone," Hanson told me.
And PAM was a pretty ambitious thing. As planned, the site would have allowed traders to purchase futures contracts based on various economic and political scenarios in the Middle East -- including U.S. recognition of a Palestinian state, GDP growth rates and political unrest -- and, more controversially, specific events such as the assassination of national leaders and the commitment of terrorist acts. From the trading patterns, the Pentagon hoped to assign probabilities on all of the above geopolitical happenings to better inform policy decisions. And think those senators are raging now? They probably would have been even madder had they realized PAM would have even allowed bets on the number of potential deaths from terrorist acts, as Hanson told me.
Clearly the politics of the project were a bit dicey, as Hanson realized. The only thing it lacked as a total public-relations disaster was a creepy logo, like that pyramid/eye combo from the now-defunct Total, I mean, Terrorism Information Awareness program. (Interestingly, retired Adm. John Poindexter of Iran-Contra fame, runs the DARPA department in charge of both programs.)
In a DARPA press release announcing the termination of the program, the agency said that "in light of the recent concerns surrounding the program, it became clear that it simply did not make sense to continue our participation in this effort." But at the same time, the statement seemed to imply that idea behind the PAM market was a sound one. "Futures markets have proven themselves to be good at predicting such things as elections results; they are often better than expert opinions," it stated. Indeed, if you perform a market-based analysis of the program -- evaluating its potential risks and potential reward -- the "terror market" really does make a lot of sense. First, the two major criticisms:
It's unseemly or in bad taste. The "yuck factor" seemed to be the crux of Clinton's critique, that bets on life and death are inherently and unforgivably repulsive. Yet the entire life insurance industry is based on carefully researched bets on the likelihood of policyholders living to a certain age based on various statistical criteria. And what about the "post-life" or funeral services industry dominated by publicly traded companies like Service Corp. and Stewart. If I am investing in these stocks, I am implicitly betting in favor of busy funeral homes and betting against any miracle cures or life-extension technologies occurring any time soon. Heck, the entire stock market for the past two years has involved in a massive bet about the chances of more terrorists strikes and their possible impact on the economy, with traders betting right after 9-11 that the worst was far from over.
Terrorists could profit from it. This is certainly true. A terrorist group could bet on a terrorist act happening at a particular time period and then go out and make it so. Of course, they can already do this through the existing oil futures market (by going long and then attacking the Saudi royal family, for instance) or even though the stock market. A group could buy put options on the S&P 500 and then attack the New York Stock Exchange or short Disney and attack one of its theme parks. Let your -- or Tom Clancy's -- imagination run wild. And recall, there were rumors that terrorists shorted airlines stocks before 9-11. So the PAM doesn't really present any opportunity that is radically different from what's already out there -- plus the existing financial markets provides a lot more financial opportunity than the $1 a contract payoffs in the PAM market.
Sort of the flipside of this argument is that the terrorists could bet that an attack wouldn't occur, thus pushing prices down and sending a misleading signal to the Pentagon. I asked Charles Polk, CEO of Net Exchange, one of the private companies involved in setting up the program, about this very issue. Polk pointed out that to really push a price, the terrorists would have to bet in volume, which would mean drawing attention to themselves and creating Internet and financial footprints that would provide clues to their whereabouts. In a way, the possibility of attracting actual terrorists to the site would be a good thing; easier to find them in an Internet café than in a cave or that now infamous border region between Pakistan and Afghanistan.
So what about the potential upside of PAM? As Hanson says, "If it has a large potential payoff and it doesn't cost that much to try, why not try?" Indeed, who cares about a "yuck factor" or terrorists pocketing a few grand if thousands of lives could be saved? The real question, then, is whether information markets like PAM really provide useful information? It seems they do. As Hanson notes in his research of information markets, racetrack market odds, for instance, have been found to improve on the prediction of racetrack experts. Similarly, orange juice commodity futures improve upon government weather forecasts. And political betting markets like the Iowa Electronic Markets consistently beat major national opinion polls in predicting U.S. presidential election results. Betting markets even beat Hewlett Packard official forecasts six times out of eight at predicting HP printer sales.
Then there's the recent Stanford study of "Saddam Securities," future contracts traded via an online betting exchange called Tradesport, based in Ireland. Before Gulf War 2.0 started, participants traded in Saddam Securities by buying and selling a contract that paid $10 if "Saddam Hussein is not President/Leader of Iraq by [Date]," and zippo otherwise. The researchers found that the security provided "a plausible estimate of the probability of war."
As Hanson concludes in his analysis of these markets: "Betting markets, and speculative markets ... seem to do very well at aggregating information. To have a say in a speculative market, you have to 'put your money where your mouth is.' Those who know they are not relevant experts shut up, and those who do not know this eventually lose their money, and then shut up. Speculative markets in essence offer to pay anyone who sees a bias in current market prices to come and correct that bias."
But these markets seems to do pretty well even if only fake money is at stake. The Foresight Exchange, around since the mid 1990s, allows traders to make bets on terrorists attacks -- and pretty much anything else -- with pretend money. And in a study of its predictive prowess, Douglas Hubbard, a risk consultant in the IT industry, found that when the Foresight Exchange markets said an event had a 30 percent or 50 percent or 70 percent chances of happening, the outocme pretty much fit those forecasts. Ken Kittlitz, co-founder of the Foresight Exchange, told me that "even though we only use play money, people try to bet rationally because they feel inside that they have their reputations on the line."
And in that lies the possible salvation of a futures market that could help analyze the probabilities of future terrorism. Use pretend money. Although it might seem that it would take real dough to achieve a high level of accuracy, Hubbard told me that in his analysis of such markets, having actual money at stake only marginally improves the accuracy. Of course, while that would derail the "terrorist can profit" argument, some critics would still see the concept as unsettling. Yet one look at the news headlines -- such as reports today that terrorists may be planning more suicide hijackings -- reminds us that there are problems far more unsettling in the world, problems worth risking some visceral discomfort in order to stop or prevent.
James Pethokoukis is a senior writer at U.S. News & World Report where he also writes the Next News science and technology column for the U.S. News web site.
Tech Central Station - www.techcentralstation.com
31-jul-2003 Robert Oslot
Ik vind het nogal een vaag verhaal over een vaag idee voor een nogal vage beurs. Bij een beurs denk ik toch echt primair aan een plaats om geld te verdienen d.m.v goederen transacties. Niet om iets beter te kunnen voorspellen. Het klinkt als een soort glazenbolbeurs. Want hoe kom je aan je informatie? Ik ben erg nieuwsgierig naar de kwartaalcijfers van Osama Bin Laden's Al Qaida netwerk. En als Osama weer toeslaat zonder ons op de hoogte te stellen, wordt hij dan ook aangeklaagd voor het achterhouden van koersgevoelige informatie? Zonder de juiste informatie blijven de interpretaties van koersverlopen puur speculatief. En wat voor concrete dingen worden er nou verkocht op deze beurs? Ik geloof ook niet dat onze vrijheid met het verdwijnen van dit plan nou zo in de verdrukking is gekomen. Ik zou zeggen gewoon een beetje nuchter blijven. Die terrorbeurs maakt op mij in ieder geval totaal geen indruk. Als wij libertariers hier al opgewonden over worden, hoe ver zijn we dan verwijderd van het moment dat we ook in dogma's gaan praten?
01-aug-2003 Erik
Het is jammer dat dit idee niet doorgaat, het zou namelijk wel interessant zijn om te zien of duizenden (?) leken over betere inzichten beschikken op dit gebied dan bijvoorbeeld de deskundigen van de CIA. Zelf heb ik hier mijn twijfels over. Ik heb meegedaan aan de politieke aandelenbeurs van de Volkskrant. Deze beurs was erg efficient, omdat allerlei informatie die van invloed zou kunnen zijn op de uitslag meteen in de koersen werd verwerkt. De koersen waren echter wel steeds een reactie op gebeurtenissen (een extreem voorbeeld was de koersontwikkeling na de moord op Fortuyn). Verder zijn de politieke voorkeuren van Nederlanders toch redelijk voorspelbaar; in die zin gaat de vergelijking met terreurnetwerken behoorlijk mank. In het meest cynische geval gaat Al Qaida flink geld verdienen op de terrorismebeurs door strategische positiename voor een grote aanslag...
Het idee lijkt op dat van de politieke aandelenmarkt van de Volkskrant. Het idee van dit soort markten, is dat de markt vaak veel beter is in het voorspellen van de kans op sociale of politieke gebeurtenissen dan een enkele expert of een peiling. Volgens de achterliggende theorie coördineert de markt als het ware de expertise van allerlei experts met verschillende inzichten en geeft zo het beste resultaat. Als de marktwaarde van een termijncontract, waarbij je $1 krijgt uitbetaald als Saddam Hoessein binnen een jaar gevonden wordt, bijvoorbeeld $0.35 is, dan betekent dat dat de kans dat dat gebeurt volgens de markt ongeveer 35% is.
Hoewel er zoals gezegd ook gevaren zijn aan zo'n systeem (het financieel belonen van terrorisme), zitten er ook voordelen aan (het helpen bij het voorspellen van gebeurtenissen). De Amerikaan Jim Bell bedacht in 1995 zelfs al een variant op dit systeem waarbij het juist de bedoeling was om aanslagen op kwaadaardige politici te stimuleren door ze financieel te belonen via een anoniem goksysteem. Bell werd overigens veroordeeld tot 10 jaar gevangenisstraf voor het stalken van een federale agent die hem aan het onderzoeken was.
Het zou wellicht aardig zijn als de vrije markt het initiatief van de Amerikaanse overheid overneemt, ook al zijn ze er zelf mee gestopt. Hoewel er natuurlijk een kans is dat de overheid gaat verbieden wat ze eerst zelf van plan waren.
Henry Sturman
Gerelateerde links:
- Pentagon schrapt goksite na kritiek
- Politieke Aandelenmarkt
- Gokken op de Toekomst
- Assassination Politics
- Assassination Politics (Jim Bell's oorspronkelijke essay)
Plaats reactie30-jul-2003 Aschwin de Wolf
Ik heb redelijk de discussie over dit voorstel gevolgd in de VS en het niveau ervan was angstaanjagend laag (politici niet uitgezonderd).
Als gevolg van het populistische argument dat je geen geld dient te verdienen aan het lijden van anderen wordt een mogelijk(!) interessant idee, met succesvolle applicaties op andere gebieden, zonder serieuze analyse volledig de grond in geboord.
30-jul-2003 Aschwin de Wolf
Vandaag op Tech Central Station:
Futures Shock
By James Pethokoukis 07/30/2003
You would think that if any member of the Senate Armed Services Committee understood a thing or two about futures markets, it would be the Cattle Queen of Arkansas, Hillary Rodham Clinton. Not only did Clinton display Soros-esque market timing during her days as a futures speculator, but she's a native of Chicago, home of the Chicago Board of Trade and the Chicago Mercantile Exchange. (It was the Merc where she famously turned $10,000 into $100,000 on cattle futures.) But the junior senator from New York was derisively dramatic when she described the Pentagon's proposed futures market for predicting terrorist strikes as a "futures market in death" as if it were a financial version of the death match in Stephen King's Running Man.
But Clinton was hardly alone on the panel in her apoplectic criticism. Senate Democratic Leader Tom Daschle denounced the trial program sponsored by the Defense Advanced Projects Agency as "an incentive to actually commit acts of terrorism." Clinton and Daschle's Senate counterparts in the GOP -- the party with the reputation of having greater faith the wisdom of markets -- saw a political Perfect Storm brewing and quickly put the kabosh on the Policy Analysis Market project which was supposed to start signing up potential traders on August 1 and be up and running on October 1.
This is just the sort of nightmare that George Mason University professor Robin Hanson fretted about when he first proposed the idea for PAM to the DARPA. "My suggestion was to go for the big time, but my wariness with these sorts of things is that the bigger thing you go for, the more you risk stepping on someone's toes or offending someone," Hanson told me.
And PAM was a pretty ambitious thing. As planned, the site would have allowed traders to purchase futures contracts based on various economic and political scenarios in the Middle East -- including U.S. recognition of a Palestinian state, GDP growth rates and political unrest -- and, more controversially, specific events such as the assassination of national leaders and the commitment of terrorist acts. From the trading patterns, the Pentagon hoped to assign probabilities on all of the above geopolitical happenings to better inform policy decisions. And think those senators are raging now? They probably would have been even madder had they realized PAM would have even allowed bets on the number of potential deaths from terrorist acts, as Hanson told me.
Clearly the politics of the project were a bit dicey, as Hanson realized. The only thing it lacked as a total public-relations disaster was a creepy logo, like that pyramid/eye combo from the now-defunct Total, I mean, Terrorism Information Awareness program. (Interestingly, retired Adm. John Poindexter of Iran-Contra fame, runs the DARPA department in charge of both programs.)
In a DARPA press release announcing the termination of the program, the agency said that "in light of the recent concerns surrounding the program, it became clear that it simply did not make sense to continue our participation in this effort." But at the same time, the statement seemed to imply that idea behind the PAM market was a sound one. "Futures markets have proven themselves to be good at predicting such things as elections results; they are often better than expert opinions," it stated. Indeed, if you perform a market-based analysis of the program -- evaluating its potential risks and potential reward -- the "terror market" really does make a lot of sense. First, the two major criticisms:
It's unseemly or in bad taste. The "yuck factor" seemed to be the crux of Clinton's critique, that bets on life and death are inherently and unforgivably repulsive. Yet the entire life insurance industry is based on carefully researched bets on the likelihood of policyholders living to a certain age based on various statistical criteria. And what about the "post-life" or funeral services industry dominated by publicly traded companies like Service Corp. and Stewart. If I am investing in these stocks, I am implicitly betting in favor of busy funeral homes and betting against any miracle cures or life-extension technologies occurring any time soon. Heck, the entire stock market for the past two years has involved in a massive bet about the chances of more terrorists strikes and their possible impact on the economy, with traders betting right after 9-11 that the worst was far from over.
Terrorists could profit from it. This is certainly true. A terrorist group could bet on a terrorist act happening at a particular time period and then go out and make it so. Of course, they can already do this through the existing oil futures market (by going long and then attacking the Saudi royal family, for instance) or even though the stock market. A group could buy put options on the S&P 500 and then attack the New York Stock Exchange or short Disney and attack one of its theme parks. Let your -- or Tom Clancy's -- imagination run wild. And recall, there were rumors that terrorists shorted airlines stocks before 9-11. So the PAM doesn't really present any opportunity that is radically different from what's already out there -- plus the existing financial markets provides a lot more financial opportunity than the $1 a contract payoffs in the PAM market.
Sort of the flipside of this argument is that the terrorists could bet that an attack wouldn't occur, thus pushing prices down and sending a misleading signal to the Pentagon. I asked Charles Polk, CEO of Net Exchange, one of the private companies involved in setting up the program, about this very issue. Polk pointed out that to really push a price, the terrorists would have to bet in volume, which would mean drawing attention to themselves and creating Internet and financial footprints that would provide clues to their whereabouts. In a way, the possibility of attracting actual terrorists to the site would be a good thing; easier to find them in an Internet café than in a cave or that now infamous border region between Pakistan and Afghanistan.
So what about the potential upside of PAM? As Hanson says, "If it has a large potential payoff and it doesn't cost that much to try, why not try?" Indeed, who cares about a "yuck factor" or terrorists pocketing a few grand if thousands of lives could be saved? The real question, then, is whether information markets like PAM really provide useful information? It seems they do. As Hanson notes in his research of information markets, racetrack market odds, for instance, have been found to improve on the prediction of racetrack experts. Similarly, orange juice commodity futures improve upon government weather forecasts. And political betting markets like the Iowa Electronic Markets consistently beat major national opinion polls in predicting U.S. presidential election results. Betting markets even beat Hewlett Packard official forecasts six times out of eight at predicting HP printer sales.
Then there's the recent Stanford study of "Saddam Securities," future contracts traded via an online betting exchange called Tradesport, based in Ireland. Before Gulf War 2.0 started, participants traded in Saddam Securities by buying and selling a contract that paid $10 if "Saddam Hussein is not President/Leader of Iraq by [Date]," and zippo otherwise. The researchers found that the security provided "a plausible estimate of the probability of war."
As Hanson concludes in his analysis of these markets: "Betting markets, and speculative markets ... seem to do very well at aggregating information. To have a say in a speculative market, you have to 'put your money where your mouth is.' Those who know they are not relevant experts shut up, and those who do not know this eventually lose their money, and then shut up. Speculative markets in essence offer to pay anyone who sees a bias in current market prices to come and correct that bias."
But these markets seems to do pretty well even if only fake money is at stake. The Foresight Exchange, around since the mid 1990s, allows traders to make bets on terrorists attacks -- and pretty much anything else -- with pretend money. And in a study of its predictive prowess, Douglas Hubbard, a risk consultant in the IT industry, found that when the Foresight Exchange markets said an event had a 30 percent or 50 percent or 70 percent chances of happening, the outocme pretty much fit those forecasts. Ken Kittlitz, co-founder of the Foresight Exchange, told me that "even though we only use play money, people try to bet rationally because they feel inside that they have their reputations on the line."
And in that lies the possible salvation of a futures market that could help analyze the probabilities of future terrorism. Use pretend money. Although it might seem that it would take real dough to achieve a high level of accuracy, Hubbard told me that in his analysis of such markets, having actual money at stake only marginally improves the accuracy. Of course, while that would derail the "terrorist can profit" argument, some critics would still see the concept as unsettling. Yet one look at the news headlines -- such as reports today that terrorists may be planning more suicide hijackings -- reminds us that there are problems far more unsettling in the world, problems worth risking some visceral discomfort in order to stop or prevent.
James Pethokoukis is a senior writer at U.S. News & World Report where he also writes the Next News science and technology column for the U.S. News web site.
Tech Central Station - www.techcentralstation.com
31-jul-2003 Robert Oslot
Ik vind het nogal een vaag verhaal over een vaag idee voor een nogal vage beurs. Bij een beurs denk ik toch echt primair aan een plaats om geld te verdienen d.m.v goederen transacties. Niet om iets beter te kunnen voorspellen. Het klinkt als een soort glazenbolbeurs. Want hoe kom je aan je informatie? Ik ben erg nieuwsgierig naar de kwartaalcijfers van Osama Bin Laden's Al Qaida netwerk. En als Osama weer toeslaat zonder ons op de hoogte te stellen, wordt hij dan ook aangeklaagd voor het achterhouden van koersgevoelige informatie? Zonder de juiste informatie blijven de interpretaties van koersverlopen puur speculatief. En wat voor concrete dingen worden er nou verkocht op deze beurs? Ik geloof ook niet dat onze vrijheid met het verdwijnen van dit plan nou zo in de verdrukking is gekomen. Ik zou zeggen gewoon een beetje nuchter blijven. Die terrorbeurs maakt op mij in ieder geval totaal geen indruk. Als wij libertariers hier al opgewonden over worden, hoe ver zijn we dan verwijderd van het moment dat we ook in dogma's gaan praten?
01-aug-2003 Erik
Het is jammer dat dit idee niet doorgaat, het zou namelijk wel interessant zijn om te zien of duizenden (?) leken over betere inzichten beschikken op dit gebied dan bijvoorbeeld de deskundigen van de CIA. Zelf heb ik hier mijn twijfels over. Ik heb meegedaan aan de politieke aandelenbeurs van de Volkskrant. Deze beurs was erg efficient, omdat allerlei informatie die van invloed zou kunnen zijn op de uitslag meteen in de koersen werd verwerkt. De koersen waren echter wel steeds een reactie op gebeurtenissen (een extreem voorbeeld was de koersontwikkeling na de moord op Fortuyn). Verder zijn de politieke voorkeuren van Nederlanders toch redelijk voorspelbaar; in die zin gaat de vergelijking met terreurnetwerken behoorlijk mank. In het meest cynische geval gaat Al Qaida flink geld verdienen op de terrorismebeurs door strategische positiename voor een grote aanslag...
