DARPA - FutureMAP Program - Policy Analysis Market (PAM) Cancelled
The DARPA FutureMAP (Futures Markets Applied to Prediction) program
is a follow-up to a current DARPA SBIR, Electronic Market-Based
Decision Support (SB012-012). FutureMAP will concentrate on market-based
techniques for avoiding surprise and predicting future events.
Strategic decisions depend upon the accurate assessment of the
likelihood of future events. This analysis often requires independent
contributions by experts in a wide variety of fields, with the
resulting difficulty of combining the various opinions into one
assessment. Market-based techniques provide a tool for producing
There is potential for application of market-based methods to
analyses of interest to the DoD. These may include analysis of
political stability in regions of the world, prediction of the
timing and impact on national security of emerging technologies,
analysis of the outcomes of advanced technology programs, or other
future events of interest to the DoD. In addition, the rapid reaction
of markets to knowledge held by only a few participants may provide
an early warning system to avoid surprise.
The DARPA FutureMAP program will identify the types of market-based
mechanisms that are most suitable to aggregate information in the
defense context, will develop information systems to manage the
markets, and will measure the effectiveness of markets for several
tasks. Open issues that will drive the types of market include
information security and participant incentives. A market that
addresses defense-related events may potentially aggregate information
from both classified and unclassified sources. This poses the problem
of extracting useful data from markets without compromising national
security. Markets must also offer compensation that is ethically
and legally satisfactory to all sectors involved, while remaining
attractive enough to ensure full and continuous participation of
individual parties. The markets must also be sufficiently robust
to withstand manipulation. FutureMAP will bring together commercial,
academic, and government performers to meet these challenges.
About the PAM Concept
'Analysts often use prices from various markets as indicators
of potential events. The use of petroleum futures contract prices
by analysts of the Middle East is a classic example. The Policy
Analysis Market (PAM) refines this approach by trading futures
contracts that deal with underlying fundamentals of relevance
to the Middle East. Initially, PAM will focus on the economic,
civil, and military futures of Egypt, Jordan, Iran, Iraq, Israel,
Saudi Arabia, Syria, and Turkey and the impact of U.S. involvement
contracts traded on PAM will be based on objective data and
observable events. These contracts will be valuable because traders
who are registered with PAM will use their money to acquire contracts.
A PAM trader who believes that the price of a specific futures
contract under-predicts the future status of the issue on which
it is based can attempt to profit from his belief by buying the
contract. The converse holds for a trader who believes the price
is an over-prediction – she can be a seller of the contract.
This price discovery process, with the prospect of profit and at
pain of loss, is at the core of a market’s predictive power.
represented by PAM contracts may be interrelated; for example,
health of a country may affect civil stability
in the country and the disposition of one country’s military
may affect the disposition of another country’s military.
The trading process at the heart of PAM allows traders to structure
combinations of futures contracts. Such combinations represent
predictions about interrelated issues that the trader has knowledge
of and thus may be able to make money on through PAM. Trading these
trader-structured derivatives results in a substantial refinement
in predictive power.
The PAM trading interface presents A Market in the Future of the
Middle East. Trading on PAM is placed in the context of the region
using a trading language designed for the fields of policy, security,
and risk analysis. PAM will be active and accessible 24/7 and should
prove as engaging as it is informative. '
Screenhot of the first page
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Version of News Release
Defense Advanced Research Projects Agency
3701 North Fairfax Drive
Arlington, VA 22203-1714
technological innovation for national security for over 40 years.”
FUTUREMAP PROGRAM CANCELED
The Director of the Defense Advanced Research Projects Agency
(DARPA) announced today that DARPA’s
participation in the Futures Markets Applied to Prediction (FutureMAP)
program has been withdrawn. The
related Small Business Innovative Research effort will be terminated
for convenience, effective immediately.
FutureMAP was one of the sponsors of the Policy Analysis Market web
site that has been the subject of recent
The FutureMAP research project was meant to explore the power of
futures markets to predict and thereby
prevent terrorist attacks. Futures markets have proven themselves
to be good at predicting such things as
elections results; they are often better than expert opinions. The
program was part of DARPA’s overall thrust to
find new ways to thwart terrorism.
was a small program that faced a number of daunting technical
market challenges”, such as Can
the market survive and will people continue to participate when
use it to prevent terrorist
attacks? Can futures markets be manipulated by adversaries?” the
DARPA Director said. “Reconsidering
those challenges in light of the recent concerns surrounding
the program, it became clear that it simply did not
make sense to continue our participation in this effort. Our
job at DARPA is to explore new ideas and
innovative research to enhance national security. The resources
that would have been applied to this project
will be applied to other more fruitful pursuits.”
believes it is important to continue funding research that examines
how to better use advanced
information technologies and processes as predictive tools
for terrorist acts. The U.S. will need such advanced
capabilities to solve the problems identified in the Congressional
report on the 9-11 attacks.
with questions, please contact Jan Walker, (703) 696-2404,
News Briefing – Mr.
Di Rita and Lt. Gen. Schwartz
On the web: http://www.dod.mil/transcripts/2003/tr20030729-0465.html
Presenter: Lawrence Di Rita, Special Assistant to the SecDef Tuesday, July 29,
Q: Larry, the Defense Department today terminated the Policy
Analysis Market after it had come under sharp criticism from some
members of Congress. What were the reasons for terminating this
program? And why did the Defense Advance Research Project Agency
allow it to proceed as far as it did before it was dropped?
Di Rita: Well, you're right, the director of the DARPA has agreed
to terminate the program. I would, I guess, just better refer you
to him, and we can get some more information.
They've evaluated competing requirements for resources across
a broad front of programs that they're looking at, programs that
are in large part focused on counterterrorism activities, and the
director has determined that this is a program that, under further
scrutiny, probably doesn't deserve continued support.
Q: I have a follow-up on that, please. It just seems -- you know,
I've been around this building 12 years. It seems so absurd that
a program like this could ever see the light of day, from what
we know about it. I mean, did it pass your muster? I mean, did
it pass anybody's muster, any --
Di Rita: What I understand -- and I really don't think we'll have
much more to say on this point because the program's been terminated.
But what I do understand is whatever procedures are in place to
evaluate these programs, as DARPA starts to look at whether or
not it's the type of program worth supporting were followed.
But I just -- there's really -- I don't think I have much more
to say on that.
Q: Well, we go back --
Q: Senator -- (inaudible) -- suggested that --
Q: -- we go
back to John -- just one more follow-up. We go back to John Poindexter
again, who apparently had his hand in this program,
as he did in one often called, you know, "big brother" about
the computerized thing. Is he still on the payroll?
Di Rita: At the moment, Admiral Poindexter continues to serve
in DARPA. As you know, the Total Information Awareness Program,
we've established a number of internal and external safeguards.
We've briefed those extensively up on the Hill. We're going to
continue to evaluate those kinds of programs with respect to the
protections that are necessary as we conduct this kind of really
cutting-edge research for counter terrorist activities. But we
have established an external review board for those kinds of things,
and we'll continue to do that sort of thing.
Again, I just don't think I have a heck of a lot more to offer
on this. So if you've got another subject, I'll take it.
Q: Just to get back to the questions that were asked at the outset
about the market program, the futures program, can we get an answer
for the record as to how that process -- how that was approved,
who signed-off on it and when?
Di Rita: We'll provide that information. I don't have any information
on it, but -- yes?
Q: -- talking about the DARPA program. It sort of slid under the
radar there, but you mentioned "established an external review
board." Was that established before this program, or --
Di Rita: I mean, it was several months ago now we established
a board for the purposes of some of the research being done that
people have concerns with regard to protecting personal information
and those kinds of things.
It was established in view of the so-called Total Information
So we've got -- I was kind of broadening out on the kind of --
some of the research being done is unusual, it's different, it's
new, it's got -- there may be people who see this as cutting edge
and maybe beyond certain limits that they're comfortable with.
So, in order to make sure that we were always going to sort of
do things in a way that everybody could be comfortable with, we
asked a number of people with expertise in these issues to form
this outside board. We announced that, gee, several months ago.
Q: And did this program pass through that external board?
Di Rita: Well, it wouldn't have necessarily. And I wasn't trying
to make a direct connection.
Di Rita: I was only
speaking to the -- I think somebody asked the question, "How could a program like this even see the
light of day?" There's a lot of interesting, unusual and,
in some cases, in this case, as it turned out, sort of not worthy
research, but research that people at one point sort of thought
let's think about this and let's decide if this is worth pursuing.
In this case, the director of DARPA decided it was not worth pursuing.
But the fact is, because there's sensitivities out there on the
kind -- on research that's new -- because we're in a new world
-- we establish these protections. And as I said, we briefed these
Q: And was the decision made because of the public furor and congressional
opposition, or because it was determined it was simply a bad idea?
Di Rita: I think I would just refer you to the man who made the
decision, and we'll get some information for you on that point.
Q: Is that Admiral Poindexter?
Di Rita: No, no. The director of DARPA, who is a gentleman by
the name of Dr. Tony Tether.
Q I thought you said "for the moment," Admiral
Poindexter remains at DARPA. So there's no misunderstanding,
is that moment
going to continue?
Di Rita: I don't have anything to announce on that, I really don't.