From: Rafal Smigrodzki (rafal@smigrodzki.org)
Date: Mon Jul 28 2003 - 18:27:17 MDT
Robin wrote:
> At 04:01 PM 7/28/2003 -0700, Rafal wrote:
>>> FYI, our DARPA project (www.policyanalysismarket.com) has just been
>>> denounced by two senators:
>>> http://wyden.senate.gov/media/2003/07282003_terrormarket.html
>>
>> ### Congratulations! The attack from Poindexter ...
>
> Actually Poindexter runs the part of DARPA that funded the project; he
> is not attacking it.
### Oops.
>
>> Is there a way of discriminating manipulations of the market
>> produced by individuals intent on temporarily affecting the market
>> (as opposed on wider market forces)?
>
> We've done lab experiments and found that giving people incentives to
> manipulate the markets doesn't make the price estimates much less
> accurate.
>
>> How would a terrorist who decides to sell futures on his planned
>> attack try to profit from this market? Could he establish
>> credentials by e.g. predicting an attack? Will he make money if his
>> attack succeeds despite the warning implied in the futures he is
>> selling?
>
> You can make money when you have more information, and a terrorist
> who trades to profit from his information is in essence being bribed
> to give a warning about his attack. In our markets he could at most
> make a few hundred dollars from doing so, and his attack would have
> to be a pretty big deal.
### I thought so. Oh, the perfidy. Absolutely lovely.
Rafal
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