Drake Sorey
All bets are off: defense-minded economist Hanson.
It sounded great - on paper. Darpa had a notion for securing the homeland that was innovative and iconoclastic: a Wall Street-like construct called the Policy Analysis Market, using public wagers to assess the likelihood of terrorism and other threats. But its announcement didn't go over well. Capitol Hill emitted righteous indignation. The media contributed the kind of incredulity that only really cynical journalists can fake. Darpa deputy John Poindexter - he of Iran-Contra and Terrorist Information Awareness - was pushed out. And the idea's architect, a George Mason University economist named Robin Hanson, was left bemused. The expert in predictive decision markets (and a theorist on the economics of space colonization who plans to have his head frozen after death) thinks people missed the point. In fact, he'd probably bet on it.
WIRED: Look what you get for hanging around Admiral Poindexter.
HANSON: I've never met him. I don't know how much he knew about our project or when he knew it. We got some funding for the PAM idea two years ago, but we were lumped into the Information Awareness Office, and that made us a juicy target. The simple theory is that people wanted to get at Poindexter, and this was a way to embarrass him.
The bit on the Web site about wagering on the assassination of Yasser Arafat didn't help.
That seems to have been someone's idea of how to make the project look more relevant.
Could you actually predict an assassination?
That's a complete misconception - perhaps an intentional misconstruction - of the project. We were focused on high-level aggregate behavior. So, we might have had an asset that depended on the total number of terrorist deaths in the West, and then also had a special event security - something that people using the market thought was especially relevant, like whether a peace treaty is signed between Israel and Palestine.
And that would have been useful to whom? The CIA?
Look, markets exist for different purposes. Some are for entertainment. Some allow speculators to play. Some are there to let people hedge risks. What we were creating was something quite different, a market for aggregating information on a topic. The likeliest customer for that is whoever most wants to know something - the CIA, sure, or the Pentagon.
Yet the project got nixed.
Well, I'm certainly frustrated, but I also study politics, so I've lost my ability to declare, "I'm just shocked, shocked." People think markets are all right for certain things and not for others. What crosses the line is betting on people dying. Personally, I focus on the possibility that better information could help save lives.
So what has this done for futures in decision markets?
We'll certainly have to extend our time estimates. What I'm most interested in is using what we've developed for commercial applications, internal corporate decisions - which ad agency to hire, which product to go with. Senators are powerful people; we were terminated very clearly.
And Darpa security guards have thrown your work into a deep place in the ocean?
No, it's public domain already. I can show you the technology paper - you can decide for yourself.
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