The Right Coast

December 19, 2005
It would be nice to have a prediction market right now
By Tom Smith

If we had a robust prediction market right now, that already had a proven track record of beating experts at predictions, imagine the effect it would have on current debates of great importance. If the PATRIOT was not renewed, and bets on there being a terrorist attack on American soil in the next 24 months might go up by 50%, or maybe even down by a little, or stay the same. Especially if the market saw chances of bad things going up, it would give something for politicians, pundits and bloggers to consider. Ditto for the NSA program leak. Various not very deep thinkers may say, it's wrong to bet on the outcome of such things! But of course, that is exactly what we are doing, with far higher stakes, whenever we make the underlying decisions. The Senate is betting the PATRIOT act provisions are not necessary to prevent another 9/11, and they are betting lots of lives on the bargain. Supporters of the Act are betting it will do no great harm to civil liberties. And so forth. Unlike most of these risks, however, bettors would take them on voluntarily.