Prediction markets, like Yahoo!'s recently opened "Buzz Game" -- a "a fantasy prediction market for high-tech products, concepts, and trends" -- are pretty interesting, but occasionally controversial. Most of you will remember the US Defense Department's Policy Analysis Market project, which allowed (in effect) bets on the likelihood of coups, assassinations and mayhem in the Middle East. The Buzz Game isn't quite so provocative; players can buy and sell "stock" in various tech-related concepts, such as operating systems, rumored items, online maps, even massively-multiplayer games, receiving dividends based upon the frequency of searches on the term on Yahoo! (all the money is virtual, so no real cash changes hands).
I used to think Yahoo was not into the new ideas game but apparently innovation is alive and well at Yahoo. We really need one of these for environmental issues tracking.
There's a sign that Yahoo! may have noted this idea, as the Buzz Game site now has an "experimental" market tracking the buzz around Atlantic Hurricanes. And while the market opportunities for this particular topic seem a bit limited to me, the hurricane market does prompt the question of what subjects would make for interesting markets, should an environmental prediction market emerge. Would we be more interested in types of events (hurricane, drought, heat wave, pandemic) or locations (India, Brazil, France, Indonesia)? The incidence of general terms ("global warming" vs. "climate change") or specific concepts (insolation, carbon cycle, whiplash ice age)? Would solutions (solar power, mass transit, high-efficiency appliances) be better markets than problems (refugees, sea level rise, permafrost melt)?
What could we learn from an environmental prediction market? It seems to me that the market for whichever concepts are in play would reflect current events and emerging concepts, and would be more of a way of measuring increasing public interest in a subject than a way of predicting events. That doesn't mean it wouldn't be of interest; indeed, it could be a good early indicator of changing attitudes towards environmental issues.
What do you think we could get out of an environmental prediction market? And where could we get one set up?
You're probably already aware of the Idea Futures website. It includes several environmental claims already - e.g. CO2LVL, GAS$4, Global Warming 2030, Big West Coast Quake, etc. Anyone can propose a new claim at any time and leverage the pre-existing user-base of several thousand (mostly techie/scientist) members.
I have been extremely interested in idea futures markets for years, both for their ability to generate predictions for the future and because they provide a way to "put your money where you mouth is" for futurists. I recently lost a lot of FX$ because I failed to forsee that the hurricane season would cause a spike in gas prices. Yet this was easily forseeable... and therefore an interesting lesson for me.
I think the most useful product of an idea futures market in environmental claims would be something to point to and say "this is the expert concensus: peak oil in 2012; sea level rise of 1m by 2025, etc.". It's another tool to point skeptics to to help convince them.
If you want to see a presentation in fiction of how useful idea futures markets could be for solving problems (not just tracking them), I highly recommend EarthWeb, by Stiegler, M. (1999).
You can see a collection of IF resources by the leading thinker in the field here:
Sadly it has not been kept up to date over the last 5 years, so much of the material is becomming dated. I believe that Hanson was involved in the DoD effort that you mention - he may be prevented from maintaining the page by "classified" hand-tying agreements.
There are a number of open source tools for building market simulations like this already out there:
I am trying to set up an install of one of these this weekend for an idea about applying the market to the BBC (let people buy stock in the content and ideas that they want on the BBC etc) and would be happy to set up an instance for worldchanging as well to try it out. Then we could get in the experts to make it better :)
Mark, thank you very much for the offer. Drop me an email and let's talk about what this would look like.
Eric, I do know about Idea Futures (although I admit to have forgotten about it when wriiting this post). I'll take another look at it.