New York Times
October 11, 2001, Thursday
Late Edition - Final , Section G , Page 3 , Column 1 

CIRCUITS

ONLINE DIARY

By Pamela LiCalzi O'Connell (NYT) 

...

Dark Prophecies

At the Foresight Exchange
(ideosphere.com), a virtual stock market where you can bet with play money 
on events from the political to the trivial, the odds have shifted in a 
sobering direction since last month's terrorist attacks. For example, one of 
the most active issues in the week after the attacks was the betting on 
whether a nuclear weapon will be used somewhere in the world by 2010. The 
chances, according to the site's 4,000 players, are better than 50 percent.

The site, which is not for profit, began seven years ago on the basis of an 
idea floated by Robin Hanson (hanson.gmu.edu
/ideafutures.html), now an assistant professor of economics at George Mason 
University. He argued that citizens should have the opportunity to bet in 
policy markets in such a way that their views would help shape the 
priorities of politicians and researchers.

Players at the Foresight Exchange test their prognostication abilities by 
making ''claims'' about future events. Shares in those claims are then 
bought and sold, driving their value -- the probability that they will 
occur, according to market consensus -- higher or lower. While not all 
predictions involve earth-shattering concerns (Will the Clinton marriage 
last through 2003? More than 80 percent say yes), most deal with serious 
topics.

A claim by one player, Randall Burns, that a major act of war or terrorism 
would occur on American soil by 2010 was recently judged to have come true, 
and trading was halted. Ken Kittlitz, who manages the site, said that claim 
had typically traded above 50 percent, its perceived probability, before 
Sept. 11.

Recently there has been active trading in Mr. Burns's next prediction, that 
another terrorist attack in the United States will claim more than 200 lives 
before 2010. That claim is trading at more than 70 percent. 

...