Thoughts on the Theory and Practice of Speculative Markets Qua Event Predictors
Essays in Philosophy, Vol. 6, No. 1, 2005
22 Pages Posted: 3 Sep 2010
Date Written: January 1, 2005
This paper analyzes the proposed use of combinatorial derivatives markets for event prediction, especially for catastrophic events such as terrorism, war, or political assassination. Following a presentation of the philosophical principles underlying these politico-economic tools, I examine case studies (U.S. DoD proposals) that evaluate their advantages and disadvantages in terms of both efficacy and moral considerations. I conclude that these markets are both fatally flawed due to internal conceptual contradictions and morally problematic.
Keywords: Derivatives, Speculative Markets, Event Prediction, DARPA, Hegel, Bataille
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