Betting on the future, anyone?
I was browsing random pages and chatting with random friends earlier on, and two terms grasped my attention: futurology and prediction market.
Futurology is pretty self-explanatory: study of the future. It was a hot topic many many years ago, but not so much right now. Anybody who says he or she is a futurologist or futurist is possibly nobody. Why is that you ask, don’t all scientists and social scientists predict the future? Well, a futurist is not someone who predicts the future, it’s someone who does nothing except predicting the future. Huge difference.
And we don’t fancy those predictions as much as our parents or grandparents did in the golden age of futurology–in 1960s and 1970s. Prophecies back then were based on things that significantly changed people’s life and well understood by most people–such as electricity and telephone. But right now, the huge assumption is that our path is determined by things like nanotechnology, computer engineering and genetic engineering, things that most of us don’t understand. We are way beyond the realm of common wisdom and all senses of directions blurred–so there’s really nothing much left to be utilised or contradicted.
A few years back The Economist had an article outlining some rules for futurists: think small, think short-term, admit uncertainty and get a real job. So if you are employed and saying “I’m not sure what is going to happen to me tomorrow”, then well, you are a wise futurist. Congratulations! Forgive my sarcasm, but predicting the future is something even the time lords can’t master and they get the TARDIS while all we have is less than a time travelling wristband.
However, something related to futurology did prosper over the past couple of decades: prediction markets. As the name suggests, they are markets that trade predictions, or more accurately, bet on the future. You can enter the game by betting on a possible or probably outcome of some events: like the result of an election, capture of a known terrorist, or nuclear proliferation. The companies that run these prediction markets then gather all the betting data and based on the value people placed on certain outcomes, give a prediction with probability attached. Some interesting numbers are: Osama bin Laden being caught by 2007–15%; Obama winning the election–75%.
No doubt these markets raise lots of controversies and have been interests of lots of researchers in the field of public policy, economics and political science. What if the prediction markets on the passing of a political leader turn into assassination markets? Prediction of election outcomes into election fraud? Yet many corporations use these markets to direct their strategic planning and marketing campaigns quite successfully.
The good news for us is, most of the prediction markets in operation do not use real money: winners get some sort of reward and losers don’t lose anything (except some ego). So I’ve heard that there’s a bet on immortality and the possible demise of mankind. I will bet if I can just figure out how I can collect if I win.
Originally posted on Terry Blog