Policy Analysis Market
The Policy Analysis Market (PAM), part of the FutureMAP project, was a proposed futures exchange developed by the United States' Defense Advanced Research Projects Agency (DARPA) and based on an idea first proposed by Net Exchange, a San Diego research firm specializing in the development of online prediction markets.
PAM was to be "a market in the future of the Middle East", and would have allowed trading of futures contracts based on possible political developments in several Middle Eastern countries. The theory behind such a market is that the monetary value of a futures contract on an event reflects the probability that that event will actually occur, since a market's actors rationally bid a contract either up or down based on reliable information. One of the models for PAM was a political futures market run by the University of Iowa, which had predicted U.S. election outcomes more accurately than either opinion polls or political pundits. PAM was also inspired by the work of George Mason University economist Robin Hanson.
At a July 28, 2003 press conference, Senators Byron L. Dorgan (D-ND) and Ron Wyden (D-OR) claimed that PAM would allow trading in such events as coups d'état, assassinations, and terrorist attacks, due to such events appearing on interface pictures on the project website.
They denounced the idea, with Wyden stating, "The idea of a federal betting parlor on atrocities and terrorism is ridiculous and it's grotesque," while Dorgan called it "useless, offensive and unbelievably stupid". Other critics offered similar outrage. Almost immediately afterwards (within less than a day) the Pentagon announced the cancellation of PAM, and by the end of the week John Poindexter, head of the DARPA unit responsible for developing it, had offered his resignation; the PAM had first been proposed & funded in 2001, and Poindexter joined DARPA in December 2002. Robin Hanson writes that Poindexter "actually had little involvement with PAM".
Further developments 
CNN reported the program would be relaunched by the private firm, Net Exchange, which helped create it, but that the newer version "will not include any securities based on forecasts of violent events such as assassinations or terror attacks". On June 11, 2007, Popular Science launched a similar program, known as the Popsci Predictions Exchange. Another project was the 'American Action Market' announced by Tad Hirsh of the MIT Media Lab in 2003, which would permit for-profit betting on major events.
There are now commercial policy analysis markets, such as Intrade, which offers futures on events such as the capture of Osama bin Laden, the U.S. Presidential Election, and the bombing of Iran.
See also 
- Death pool (also "dead pool")
- Assassination market, a death/dead pool specific to assassination of a given person, the set of such pools, or a subset of that set (as delimited by, e.g., geographic region or type of persons involved)
- Future Map and Information Awareness Office FutureMap Project
- The Wisdom of Crowds, a popular book which supports the Policy Analysis Market
- Dumb agent theory
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- FutureMAP project
- Pentagon Prepares a Futures Market on Terror Attacks
- "On the web site, as a backdrop to bold text, were faint background sample screens. In a small (less than 2 percent) section of two such screens, Polk had included as colorful examples of possible miscellaneous items an assassination of Yasser Arafat, a missile attack by North Korea, and the overthrow of the king of Jordan." "The Policy Analysis Market: A Thwarted Experiment in the Use of Prediction Markets for Public Policy", Robin Hanson
- "Pentagon Plans Online Terror Bets". BBC. July 29, 2003
- Poindexter to Leave Pentagon Research Job
- "DARPA’s first call for proposals went out in May 2001 under the name “Electronic Market-Based Decision Support.” The call basically said, “We’ve heard this works elsewhere; show us it works for problems we care about.” Proposals were due in August, and by December two firms had won SBIR (small business independent research) grants." Hanson ibid
- Gongloff, Mark (November 17, 2003). "Middle East futures market returns. Private firm will restart Pentagon project, but without contracts for violence, in 2004.". CNN.com. Retrieved 2006-07-16.
Was http://wwww.policyanalysis.org, no longer present.
- Robin Hanson: Idea Futures
- Slate: "Damn the Slam PAM Plan!", James Surowiecki, Slate magazine
- Hanson, Robin "The Policy Analysis Market (and FutureMAP) Archive". Archived from the original on 2005-03-28. Retrieved 2006-07-16.
- The Informed Press Favored the Policy Analysis Market: Research paper by Robin Hanson analyzing press reaction to PAM
- "A Terror futures trading market is being developed by the Pentagon / Darpa: Collection of dated articles from WSJ and others". www.mongabay.com. Retrieved 2006-07-16.
- Robin Hanson Policy Analysis Market
- DARPA - FutureMAP Program - Policy Analysis Market Cancelled
Congressional record 
- Congressional Record: July 29, 2003 (Senate): Transcript of the debate on the Senate floor after NY Times wrote an article about PAM.
- Talent Show: Even More on Terrorist Futures. Contains relevant analytical quotes and clips.