Betting on the future

'Net market putting price on new ideas

Calgary Sun

Think they'll cure cancer within 15 years? The Dow Jones Average will break 5,000? President Bill Clinton will be re-elected in 1996?

Log on to a Calgary Internet site and you can put your money where your mouth is.

Well, virtual money at least.

Idea Futures lets you bet on ideas and the probability they'll come true.

Literally a marketplace of ideas, Idea Futures is gaining international recognition as the hottest thing on the 'Net.

In June, it won the coveted $10,000 Golden Nica award for the world's best Web site.

Idea Futures will also be the subject of an article in the August issue of Wired, a magazine that's required reading for 'Net fans and other technophiles.

The Web site, on-line since September 1994, is the creation of five one-time University of Calgary graduate students: Greg James, David McFadzean, Duane Hewitt, Ken Kittlitz and Mark James.

But the intellectual father of the project is California scientist Robin Hanson, who believes if played with real money, Idea Futures could revolutionize the way government and business funds research and development.

Hanson, who saw how many times in history good ideas were ignored in favor of erroneous ones because of politics, says a betting arena for ideas, such as which scientific paths of inquiry should be funded, would reward institutions and companies that planned more carefully.

Using real money, a market of ideas would provide a much more accurate indicator of scientific consensus on a subject.

As Hanson says, A rejected visionary would have a new way to get publicity for his ideas, and a reward for being right against the establishment. True cranks would subsidize leveller heads. businesses could also hedge against risky technological ventures, by betting against themselves in the ideas market -so if they were wrong, their losses would be reduced. (Imagine how the makers of Betamax technology could have hedged their bets by betting for VHS back in the '80s.)

Idea Futures' founders believe that gambling on the probability of various outcomes at the site give a better idea of whether or not they'll come true than polling or pundits.

What Idea Futures does is subject punditry to market forces: Predict well and you'll make money. slip up and you'll pay.

That's because gamblers have to back up their pronouncements-Alberta government will cut clinic funding or O.J. Simpson will be found guilty- with bucks.

For the time being, bettors use virtual money.

That's because it would take an extraordinary ruling by the Alberta Securities Commission to allow trading in futures contracts on ideas-which are essentially what is being traded on Idea Futures.

The site issues contracts on claims such as "Nudity will shown on Network TV by 1999."

In 1999, if the claim proves true, bettors holding the contracts would receive their full dollar value.

Until that time, the contracts will trade at a fraction of their full price, based on the market's estimation of the odds that the claim will be proven true.

Hewitt says the next step for Ideas Futures is to start charging people to play.

The popular site has already attracted more than 1,200 players and its managers are betting they can make money in the marketplace of ideas.

To visit Idea Futures on the Internet, go to: