Monday, August 04, 2003

[12:49 PM] This “terrorist” futures network that has recently been cancelled after a public furor is fascinating. I admit I fell into the trap of being a tad bewildered about a futures market set up to predict terrorist attacks. But this story got wildly distorted right off the bat. This was not a plan to bet on terrorist attacks and political assassinations, but rather a market to engage a diverse group of “insiders” on their insights into geopolitical events in the Middle East. Here’s a more accurate, if late description of the project. This article in the NYT laments that the project suffered from bad press and sets the record straight on a lot of the misinformation.

[P]oliticians, reporters and editorial writers mistakenly jumped onto "assassination and terrorist attack futures" as a fundamental part of the market design.

Interestingly, the author doesn’t mention his own paper as being a part of the hysteria. Here’s a selection of NYT headlines (and of course the Times was by no means alone in this respect):

"Stock Prices and the Terror Factor"
"Pentagon Abandons Plan for Futures Market on Terror"
"Poindexter to Resign Following Terrorist Futures Debacle"
"Poindexter Will Be Quitting Over Terrorism Betting Plan"

The NPR radio program “The Connection” featured a great show on this today. It featured among other guests Robin Hanson, one of the co-creators of the project. Hanson several times had to calm the hysterical guest host, who despite Hanson’s patient and multiple explanations could not get it in her head that the market was not designed for predicting terrorist attacks and assassinations. Give it a listen.

# posted 12:54 PM