Predictive markets are a way of obtaining “wisdom of crowds” type knowledge, aggregating the opinions of multiple experts and concentrating the mind of each through requiring the backing of individual opinions with hard cash. As external conditions change, the proclivity of individuals to buy or sell can be averaged through a market to determine a price, which is claimed to be a remarkably accurate indicator of real probability.
Futures market created for bird flu
Organizers hope to recruit at least 100 epidemiologists, veterinarians and other medical experts from around the world for the two-year project. They will be asked to join an online trading system akin to agricultural futures markets, in which investor buys contracts that businesses will be able to deliver certain volumes of, say, corn or pork bellies.
But in this project, the contracts represent not the likelihood of a good corn harvest but the odds that deadly bird flu will infect a human in Hong Kong by July 1.
“Yes” contracts on that prediction are currently trading at 43 cents. That means the experts think there’s a 43 percent chance of that occurring.
Andy Roberts is a writer who initiated DARnet. Contact me on aroberts@gmail.com or @aroberts on twitter
