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Designing real terrorism futures


  • Robin Hanson



In July 2003, the Policy Analysis Market (PAM) was described as terrorism futures, and immediately cancelled. While PAM was not in fact designed to be terrorism futures, I here consider five design issues with implementing and using real terrorism futures: combinatorics, manipulation, moral hazard, hiding prices, and decision selection bias. As neither these nor other problems seem insurmountable, terrorism futures appears to be a technically realistic possibility. Copyright Springer Science+Business Media B.V. 2006

Suggested Citation

  • Robin Hanson, 2006. "Designing real terrorism futures," Public Choice, Springer, vol. 128(1), pages 257-274, July.
  • Handle: RePEc:kap:pubcho:v:128:y:2006:i:1:p:257-274
    DOI: 10.1007/s11127-006-9053-9

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    References listed on IDEAS

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    13. Jan Hansen & Carsten Schmidt & Martin Strobel, 2004. "Manipulation in political stock markets - preconditions and evidence," Applied Economics Letters, Taylor & Francis Journals, vol. 11(7), pages 459-463.
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    Cited by:

    1. John Quiggin, 2009. "Six Refuted Doctrines," Economic Papers, The Economic Society of Australia, vol. 28(3), pages 239-248, September.
    2. Justin Wolfers & Eric Zitzewitz, 2006. "Prediction Markets in Theory and Practice," NBER Working Papers 12083, National Bureau of Economic Research, Inc.
    3. Sebastian Goers & Alexander Wagner & J├╝rgen Wegmayr, 2010. "New and old market-based instruments for climate change policy," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 12(1), pages 1-30, June.
    4. Wolk Leonard & Peeters Ronald, 2009. "The role of monetary incentives in prediction markets: a time series approach," Research Memorandum 013, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).


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