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PAM was to be a "a market in the future of the Middle East", and would have allowed trading of [[futures contract]]s based on possible political developments in several [[Middle East]]ern countries. The theory behind such a market is that the monetary value of a futures contract on an event reflects the probability that that event will actually occur, since a market's actors rationally bid a contract either up or down based on reliable information. One of the models for PAM was a political futures market run by the [[University of Iowa]], which has allegedly proven more accurate in predicting the outcomes of U.S. [[election]]s than either [[opinion poll]]s or political [[Pundit (politics)|pundit]]s. PAM was also inspired by the work of [[George Mason University]] [[economics|economist]] [[Robin Hanson]].
PAM was to be a "a market in the future of the Middle East", and would have allowed trading of [[futures contract]]s based on possible political developments in several [[Middle East]]ern countries. The theory behind such a market is that the monetary value of a futures contract on an event reflects the probability that that event will actually occur, since a market's actors rationally bid a contract either up or down based on reliable information. One of the models for PAM was a political futures market run by the [[University of Iowa]], which has allegedly proven more accurate in predicting the outcomes of U.S. [[election]]s than either [[opinion poll]]s or political [[Pundit (politics)|pundit]]s. PAM was also inspired by the work of [[George Mason University]] [[economics|economist]] [[Robin Hanson]].


At a [[July 28]], [[2003]] [[press conference]], [[United States Senate|Senators]] Byron L. Dorgan ([[United States Democratic Party|Democrat]]- [[North Dakota]]) and [[Ron Wyden]] (Democrat- [[Oregon]]) revealed that PAM would allow trading in such events as ''[[coup d'état|coups d'état]]'', [[assassin|assassinations]], and [[terrorism|terrorist]] attacks. This information caused a political uproar, with opponents of the program denouncing it as "grotesque", "bizarre", and "morally repugnant". Almost immediately afterwards [[the Pentagon]] announced the cancellation of PAM, and by the end of the week [[John Poindexter]], head of the DARPA unit responsible for developing it, had offered his resignation.
At a [[July 28]], [[2003]] [[press conference]], [[United States Senate|Senators]] Byron L. Dorgan ([[United States Democratic Party|Democrat]]- [[North Dakota]]) and [[Ron Wyden]] (Democrat- [[Oregon]]) revealed that PAM would allow trading in such events as ''[[coup d'état|coups d'état]]'', [[assassin|assassinations]], and [[terrorism|terrorist]] attacks. This information caused a political uproar, with opponents of the program denouncing it as "grotesque", "bizarre", and "morally repugnant". Almost immediately afterwards (within less than a day) [[the Pentagon]] announced the cancellation of PAM, and by the end of the week [[John Poindexter]], head of the DARPA unit responsible for developing it, had offered his resignation.


==See also==
==See also==
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* [[Slate]]: [http://slate.msn.com/id/2086427/ James Surowiecki]
* [[Slate]]: [http://slate.msn.com/id/2086427/ James Surowiecki]
* [http://www.iwar.org.uk/news-archive/tia/futuremap-program.htm DARPA - FutureMAP Program - Policy Analysis Market Cancelled]
* [http://www.iwar.org.uk/news-archive/tia/futuremap-program.htm DARPA - FutureMAP Program - Policy Analysis Market Cancelled]
* [http://www.fas.org/sgp/congress/2003/s072903.html Congressional Record: July 29, 2003 (Senate)]: Transcript of the debate on the Senate floor after NY Times wrote an article about PAM.

Revision as of 18:58, 12 May 2006

The Policy Analysis Market (PAM) was a proposed futures exchange developed by the United States' Defense Advanced Research Projects Agency and based on an idea first proposed by Net Exchange[1], a San Diego research firm specializing in the development of online markets.

PAM was to be a "a market in the future of the Middle East", and would have allowed trading of futures contracts based on possible political developments in several Middle Eastern countries. The theory behind such a market is that the monetary value of a futures contract on an event reflects the probability that that event will actually occur, since a market's actors rationally bid a contract either up or down based on reliable information. One of the models for PAM was a political futures market run by the University of Iowa, which has allegedly proven more accurate in predicting the outcomes of U.S. elections than either opinion polls or political pundits. PAM was also inspired by the work of George Mason University economist Robin Hanson.

At a July 28, 2003 press conference, Senators Byron L. Dorgan (Democrat- North Dakota) and Ron Wyden (Democrat- Oregon) revealed that PAM would allow trading in such events as coups d'état, assassinations, and terrorist attacks. This information caused a political uproar, with opponents of the program denouncing it as "grotesque", "bizarre", and "morally repugnant". Almost immediately afterwards (within less than a day) the Pentagon announced the cancellation of PAM, and by the end of the week John Poindexter, head of the DARPA unit responsible for developing it, had offered his resignation.

See also

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