Pentagon's Futures Market Plan Condemned

John A. Stovall wrote:

On Tue, 29 Jul 2003 17:23:53 +0300, transputer
wrote:

WASHINGTON - The Pentagon (news - web sites) is setting up a
stock-market style system in which investors would bet on terror
attacks, assassinations and other events in the Middle East. Defense
officials hope to gain intelligence and useful predictions while
investors who guessed right would win profits.

Interesting idea which looks like an expansion of what are called
Delphi forecasting techniques.

I would like to see how it works.
Actually, it's the opposite.
Delphi is about questioning large numbers of people who
DON'T have a specific knowledge of the situation.
It turns out that if you ask 1000 people (WHO DON'T KNOW
THE ANSWER) how many people died of Spanish Influenza, or how
many loaves of rye bread were discarded as spoiled in Germany in
1996 (No @#$%^#$#ing clue), on average, you get the right answer.
The problem is that for 50 years, they have tried to
apply this to the future, but it doesn't work.
In regards to this specific problem, a market attracts
people who are EXPERTS, so Delphi really doesn't apply.
There is, however, another theory, that says markets and
betting by experts can predict an answer. Naval intelligence
used this technique to find the H-Bombs dropped off Spain in the
1960s and the Russian SSBN that sunk in the Pacific, later
partially recovered by the Glomar Explorer (Source, Blind Man's
bluff).
The problem with applying it to terrorism is that it
functions not to unearth data, but in aggregate to filter data
out, and terrorism is a data poor, as opposed to a data rich
situation.
I think that it was bad idea that was driven by a
philosophy that markets solve every problem.
BTW, it was me on the CSPAN morning call in raising
Delphi a few days ago.
--
--Matthew Saroff
Rules to live by:
1) To thine own self be true
2) Don't let your mouth write no checks that your butt can't cash
3) Interference in the time stream is forbidden, do not meddle in causality
Check http://www.pobox.com/~msaroff, including The Bad Hair Web Page

To rephrase my other post, Lend Lease = US involvement in European
front of WWII.

But that's wrong though. Lend Lease = US involvement in
*Britian's* front of WWII.

Just a minor point, lend lease also went to the USSR and Free France.

Dan, U. S. Air Force, retired