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  evilwulfie, May 10th, 2007 @ 7:12pm

  
  

  huh?

  what?

   

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  Lawrence D'Oliveiro, May 10th, 2007 @ 9:18pm

  
  

  Markets ... Predictive of What?

  Free markets are prone to boom-bust cycles. They're also prone to abuses like price-fixing, insider trading, deceptive advertising, and just plain fraud.

  As a result, free markets need ongoing regulation in order to remain free.

  If these prediction markets are following the same basic model, then they will be prone to all the same problems. You're going to need an SEC, Commerce Commission/Better Business Bureau/whatever (as appropriate for your jurisdiction) to try to rein in the worst of these. And yet you're still going to get the occasional October 1929 or Enron.

  And what happens to the predictive value in all that?

   

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  Bill, May 11th, 2007 @ 5:45am

  
  

  Terror prediction market

  Adm. John Poindexter formed a Terror Futures Market while he was at DARPA which would have allowed investors to profit by correctly predicting terrorist attacks, assassinations and overthrows of regimes. He was ridiculed at the time and was forced to resign for this. I felt at the time it was very foresighted and would have brought together the greatest minds in the field and would have helped to predict much of what we've gone through since then. There was a huge politically correct outrage in the media about it and the whole project was canned.

   

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  Lawrence D'Oliveiro, May 11th, 2007 @ 8:41am

  
  

  Re: Terror prediction market

  Can't imagine why it was a bad idea? Think about what "insider trading" would mean in a terrorism futures market...

   

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  Bill, May 11th, 2007 @ 6:40pm

  
  

  Re: Re: Terror prediction market

  The insider trading would be pretty easy to track, the profits, if any, are very small and not worth such a huge risk and insider trading would be self predictive leading to capture. The benefit of such a system could be huge. This is not a system like the stock market with huge amounts of money it's more like small time poker if they even use real money. It's more a way of people to freely communicate and place value on different ideas.

   

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  Doug, May 13th, 2007 @ 2:34am

  
  

  Not quite like gambling

  While there is little difference between short-term investment and gambling, long-term investment is not quite the same. You provide money (IPO) or borrowing power to a company in hopes that they will succeed and be able to pay you back. This provides a benefit to the overall economy, for which you take a cut (if the company succeeds). Investing makes the pie bigger. Gambling does not.

   

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