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{{Short description|Proposed futures prediction market}} {{Use mdy dates|date=October 2017}} The '''Policy Analysis Market''' ('''PAM'''), part of the '''FutureMAP''' project, was a proposed [[futures exchange]] developed, beginning in May 2001, by the [[Information Awareness Office]] (IAO) of the United States [[Defense Advanced Research Projects Agency]] (DARPA), and based on an idea first proposed by Net Exchange, a San Diego, California, research firm specializing in the development of online [[prediction market]]s.<ref>{{cite web |url= http://infowar.net/tia/www.darpa.mil/iao/FutureMap.htm |title=Programs: FutureMap |publisher=[[Information Awareness Office]], United States [[Defense Advanced Research Projects Agency]] |via=InfoWar.net |date=2003 |archive-url= https://web.archive.org/web/20120422065908/http://infowar.net/tia/www.darpa.mil/iao/FutureMap.htm |archive-date=April 22, 2012 |url-status=dead |access-date=October 29, 2019}} This is an archive of the official FutureMap and PAM webpage, which was eventually taken offline by DARPA.</ref> PAM was shut down in August 2003 after multiple [[United States Senate|US senators]] condemned it as an [[Assassination market|assassination and terrorism market]],<ref name=hanson2007/> a characterization criticized in turn by futures-exchange expert [[Robin Hanson]] of [[George Mason University]], and several journalists. Since PAM's closure, several [[Private sector|private-sector]] variations on the idea have been launched. == Proposal == PAM was to be "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 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.<ref>{{cite news |url= https://www.nytimes.com/2003/07/29/us/threats-responses-plans-criticisms-pentagon-prepares-futures-market-terror.html |title=Threats and Responses: Plans and Criticisms; Pentagon Prepares a Futures Market on Terror Attacks |first=Carl |last=Hulse |work=[[The New York Times]] |date=July 29, 2003 |access-date=October 29, 2019}}</ref><ref name="SS1" /> One of the models for PAM was a political futures market run by the [[University of Iowa]], which had predicted US election outcomes more accurately than either opinion polls or political [[Pundit (politics)|pundit]]s. PAM was also inspired by the work of [[George Mason University]] economist [[Robin Hanson]].<ref name="SS1">{{cite web |last=Lundin |first=Leigh |title=PAM, PRISM, and Poindexter |url= http://www.sleuthsayers.org/2013/07/pam-prism-and-poindexter.html |work=SleuthSayers: Professional Crime-Writers and Crime-Fighters |date=July 7, 2013 |location=Washington, DC |access-date=January 4, 2014}}</ref><ref>{{cite web |url= http://www.sirc.org/articles/policy_analysis.shtml |title=Policy Analysis Market and the Political Yuck Factor β why Americans shied away from a geopolitical futures market |date=2004 |author=<!--Staff writer(s); no by-line.--> |work=SIRC.org |publisher=[[Social Issues Research Centre]] |access-date=October 29, 2019}}</ref> == Opposition == At a July 28, 2003, press conference, [[United States Senate|US Senators]] [[Byron L. Dorgan]] ([[United States Democratic Party|D]]-[[North Dakota|ND]]) and [[Ron Wyden]] (D-[[Oregon|OR]]) claimed that PAM would allow trading in such events as {{lang|fr|[[Coup d'Γ©tat|coups d'Γ©tats]]}}, assassinations, and terrorist attacks, due to such events appearing on interface pictures on the project website. "On the web site, as a backdrop to bold text, were faint background sample screens. In a small (less than 2 percent) section of two such screens, Polk had included as colorful examples of possible miscellaneous items an assassination of Yasser Arafat, a missile attack by North Korea, and the overthrow of the king of Jordan."<ref name=hanson2007>{{cite journal |last1=Hanson |first1=Robin |title=The Policy Analysis Market (A Thwarted Experiment in the Use of Prediction Markets for Public Policy) |journal=Innovations: Technology, Governance, Globalization |date=August 2007 |volume=2 |issue=3 |pages=73β88 |doi=10.1162/itgg.2007.2.3.73|s2cid=57563194 |doi-access=free |url=http://www.mitpressjournals.org/doi/pdfplus/10.1162/itgg.2007.2.3.73 }}</ref> They denounced the idea, with Wyden stating, "The idea of a federal betting parlor on atrocities and terrorism is ridiculous and it's grotesque", while Dorgan called it "useless, offensive and unbelievably stupid".<ref>{{cite book |last1=Lee |first1=Newton |title=Counterterrorism and Cybersecurity: Total Information Awareness |date=7 April 2015 |publisher=Springer |isbn=978-3-319-17244-6 |page=146 |edition=Second |url=https://books.google.com/books?id=zSv3BwAAQBAJ |access-date=17 November 2022 |language=en |chapter=6}}</ref> Other critics offered similar outrage. 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.<ref>{{cite news |url=https://www.washingtonpost.com/wp-dyn/articles/A10810-2003Jul31.html |title=Poindexter to Leave Pentagon Research Job |newspaper=[[The Washington Post]] |date=July 31, 2003 |url-status=dead |access-date=September 8, 2017 |archive-url=https://web.archive.org/web/20120805115248/http://www.washingtonpost.com/wp-dyn/articles/A10810-2003Jul31.html |archive-date=August 5, 2012 }}</ref> PAM had first been proposed and funded in 2001,{{efn|"DARPA's first call for proposals went out in May 2001 under the name "Electronic Market-Based Decision Support." The call basically said, 'We've heard this works elsewhere; show us it works for problems we care about.' Proposals were due in August, and by December two firms had won SBIR (small business independent research) grants."<ref name=hanson2007/>}} Poindexter joined DARPA in December 2002, and Hanson claimed that Poindexter "actually had little involvement with PAM".<ref name=hanson2007/> == Further developments == CNN reported the program would be relaunched by the private firm, Net Exchange,<ref name="SS1" /> that helped create it, but that the newer version "will not include any securities based on forecasts of violent events such as assassinations or terror attacks".<ref name="Middle">{{cite news |title=Middle East futures market returns. Private firm will restart Pentagon project, but without contracts for violence, in 2004. |first=Mark |last=Gongloff |date=November 17, 2003 |work=[[CNN.com]] |publisher=[[Time Warner]] |url =https://money.cnn.com/2003/11/17/news/terror_futures/index.htm |access-date=2006-07-16}}</ref> On June 11, 2007, ''[[Popular Science]]'' launched a similar program, known as the [[Popular Science Predictions Exchange|PopSci Predictions Exchange]]. Another project was the American Action Market announced by Tad Hirsh of the [[MIT Media Lab]] in 2003, which would permit for-profit betting on major events. There are now commercial [[Policy analysis|policy-analysis]] markets that perform such functions. One, [[Intrade]], had previously offered futures on events such as the capture of Osama bin Laden, the US Presidential Election, and the bombing of Iran. As of March 10, 2013, all trading had been suspended on Intrade's website due to undisclosed financial irregularities. ==See also== * [[Death pool]] (also "dead pool") * [[Future Map]] and [[Information Awareness Office#Futures Markets Applied to Prediction (FutureMAP)|Information Awareness Office FutureMap Project]] * ''[[The Wisdom of Crowds]]'', a book which supported the Policy Analysis Market * [[Dumb agent theory]] * [[Polymarket]] ==Notes== {{Notelist}} ==References== {{Reflist}} ==External links== {{more footnotes|date=October 2019|reason=The majority of these should be used as citations to expand the article, instead of being dumped here like a link-farm.}} * {{cite web |url= http://www.fas.org/sgp/congress/2003/s072903.html |title=Trading in Death |work=Congressional Record |at=Senate section, pp. S10082βS10083 |date=July 29, 2003 |via=Project on Government Secrecy, [[Federation of American Scientists]] |archive-url= https://web.archive.org/web/20160513123322/http://www.fas.org/sgp/congress/2003/s072903.html |archive-date=May 13, 2016 |url-status=live |access-date=October 29, 2019}} β Transcript of the debate on the Senate floor after ''The New York Times'' wrote an article about PAM. * {{cite magazine |magazine=[[Slate (magazine)|Slate]] |url= http://slate.com/id/2086427/ |title=Damn the Slam PAM Plan! Canceling the Pentagon's futures market is cowardly and dumb. |first=James |last=Surowiecki |author-link=James Surowiecki |date=July 30, 2003 |archive-url= https://web.archive.org/web/20171023143744/http://www.slate.com/articles/news_and_politics/hey_wait_a_minute/2003/07/damn_the_slam_pam_plan.html |archive-date=October 23, 2017 |url-status=dead |access-date=October 29, 2019}} * {{cite web |last=Hanson |first=Robin |author-link=Robin Hanson |title=The Policy Analysis Market (and FutureMAP) Archive |work=Hanson.GMU.edu |publisher=[[George Mason University]] |url= http://hanson.gmu.edu/policyanalysismarket.html |date=2005 |archive-url= https://web.archive.org/web/20190614231440/http://mason.gmu.edu/~rhanson/policyanalysismarket.html |archive-date=June 14, 2019 |url-status=live |access-date=October 29, 2019}} * {{cite web |last=Hanson |first=Robin |title=The Informed Press Favored the Policy Analysis Market |work=Hanson.GMU.edu |url= http://hanson.gmu.edu/PAMpress.pdf |date=August 8, 2005 |archive-url= https://web.archive.org/web/20190513010258/http://mason.gmu.edu/~rhanson/PAMpress.pdf |archive-date=May 13, 2019 |url-status=live |access-date=October 29, 2019}} β A research paper analyzing the media reaction to PAM * {{cite web |last=Hanson |first=Robin |title=Idea Futures |work=Hanson.GMU.edu |url= http://mason.gmu.edu/~rhanson/ideafutures.html |date=June 12, 1996 |archive-url= https://web.archive.org/web/20190912124408/http://mason.gmu.edu/~rhanson/ideafutures.html |archive-date=September 12, 2019 |url-status=live |access-date=October 29, 2019}} * {{cite web |url= http://www.iwar.org.uk/news-archive/tia/futuremap-program.htm |title=DARPA - FutureMAP Program - Policy Analysis Market (PAM) Cancelled |work=IWS β The Information Warfare Site |date=2003 |editor-first=Wanja Eric |editor-last=Naef |archive-url= https://web.archive.org/web/20190116055513/http://www.iwar.org.uk/news-archive/tia/futuremap-program.htm |archive-date=January 16, 2019 |url-status=live |access-date=October 29, 2019}} β Includes text and PDF versions of the DARPA press release announcing the end of PAM, and other materials such as a Dept. of Defense news briefing and archived images from the PAM funding proposal. * {{cite web |url= http://www.thetalentshow.org/archives/000319.html |work=The Talent Show |title=Even More on Terrorist Futures |date=July 30, 2003 |archive-url= https://web.archive.org/web/20060511210542/http://www.thetalentshow.org/archives/000319.html |archive-date=May 11, 2006 |url-status=dead |access-date=October 29, 2019}} β Contains relevant analytical quotes and clips. [[Category:Prediction markets]] [[Category:DARPA]]
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