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Media Guide
Media Guide
How The Simon Exchange Will Help Journalists
The media could use some help covering scientific controversies. As Dr. Simon explained,
Schools of Journalism currently teach nothing but the standard reportorial methods of interview and adversarial discussion of the facts. These methods serve well for covering fires and politics but fail badly on other stories modern reporters cover regarding policy issues that require the use of probability, sampling, and inferential statistics.
Julian L. Simon, Hoodwinking the Nation 73 (1999).
The Simon Exchange aims to help journalists, and through them the public, understand scientific issues. Because it promises to give reporters a quick and quantified measure of what committed experts really think about the future, the Simon Exchange would provide a counterbalance to the dramatic, idiosyncratic, soundbite-sized forecasts that currently monopolize the media's discussion of scientific, technological, and policy issues. Someday, perhaps, news stories about global warming, ozone depletion, and the like will routinely add, "On the Simon Exchange, the corresponding claim currently trades at a price of . . . ."
The Simon Exchange would thus no doubt often serve as a corrective to alarmist stories about impending doom. That is not its main goal, however. After all, we will very much want to know if, notwithstanding their past exagerrations, doomsayers get a forecast right. No one can say now whether a claim of catastrophe will cost little on the Simon Exchange (indicating that few experts believe disaster looms) or a great deal (indicating the contrary). In either event, though, the Simon Exchange will give us an accurate assessment of the current consensus. Doomsayers will have a fair shot at giving us fair warning.
Media Coverage of The Simon Exchange
Jim Giles, Wanna Bet? 420 Nature 354 (November 28, 2002):
[W]hat would happen if an ideas market were to be played by scientific experts using their own cash? According to Tom Bell, a [professor] at Chapman University [School of Law] in Orange, California, such a market would be extremely useful, as the price of shares in a particular idea would provide a snapshot of how the scientific community felt about that issue.
Consider a claim about climate change, such as the size of the expected rise in mean global temperature by 2100. As long as enough scientists with relevant knowledge played the market, the price should reflect the latest developments in climate research. Policy-makers could use the market as a way of assessing current thinking, free from the bias of industry and activist groups-both of which tend to quote temperature changes at the extreme ends of the spectrum.
Bell is now looking for an institution to host the project, which he has named the Simon Market in honour of [Julian] Simon's work. But could scientists be persuaded to sink their money into such a market? "If you present it as a scientific experiment then scientists would be eager to try it, suggests Bell. "Scientists have egos and like money as much as anyone else." His proposal is currently being considered by the Mercatus Center, a public-policy, law and economics offshoot of George Mason University.
You can find the full Nature article, in PDF format, here.
Vicky Nolan, New 'Idea Market' Enters the Gray Area Between Trading and Betting, Interactive Gaming News, September 19, 2000, at <www.igamingnews.com>:
The operator of a new "dot org" startup is developing an intriguing betting site that would give scientists an opportunity to bet on idea futures. . . . "A market in science claims would offer a very powerful social benefit. By quantifying the current consensus on difficult questions of science, technology, and policy, it would give scientists, reporters, and lawmakers very useful information. The market would, in other words, generate a positive externality," explains the founder of [the] Simon Market, Tom Bell.
Bell, currently a visiting professor with the University of San Diego School of Law and an adjunct professor with the Cato Institute, says the idea futures site he's developing would target scientists wanting to wager real money on scientific ideas or claims. The late Dr. Julian Simon, a scholar who worked to debunk scientific misconceptions, as well as the work of Dr. Robin Hanson, who developed the theory behind idea futures, inspired Bell to develop the Simon Market.
The site, says Bell, would let experts "put their money where their mouths are" when they buy or sell coupons payable when or if a particular claim should come true. In a sense, the site would operate much like an online bookmaking site, something that hasn't been legalized in the United States. Even so, Bell, although he's only just become his research, believes that his site would probably be legal to operate in the United States. "A market in claims solely about objective and natural facts would not qualify as gambling under most states' statutes," he argued.
. . .
. . . Bell explains why the Simon market is probably legal: "First of all, claims about objective natural facts are not based on uncertain events. Indeed, some such claims--such as the mass of a neutrino--are not based on an event' at all. Even ones that are based on events--such as say, whether global warming has begun--may not turn on the outcome of an 'uncertain' event. The event in such cases may have already taken place and it remains only for us to arrive at some consensus about interpreting it."
He cautions, "I'm not claiming this of all science-related claims, mind you. I'm just saying that some properly-phrased claims could escape the definition of 'bet or wager'."
"Secondly," Bell continues, "and more fundamentally, a market in science claims should not qualify as gambling because it does not at all raise the same policy issues as gambling does. It does not rely on 'artificial' risks created solely for entertainment value. It will almost certainly not give rise to problems of 'compulsive' gambling because its subject-matter will prove too dry and the bets too slow to resolve."
Another scholarly endeavor, the Iowa Electronic Market (IEM) at www.biz.uiowa.edu/iem, is a futures market (operated by the University of Iowa) that allows traders to wager on the future outcome of economic and political events. . . . For the IEM to operate, the Commodities Futures Trading Commission (CFTC) issued a "no action letter" that requires the site to operate under certain guidelines. Bell sees some similarity between the IEM site and his Simon Market site, calling it a "tough call" whether his site would fall under CFTC regulation.
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While Bell has just opened his site at www.simonmarket.org, actual betting is still a dream. "All I aim for is a low-key, academic site that media folks cite once and a while," he acknowledged. It will be interesting to see how scientists perceive his site, and whether they'll be willing to wager on the future of a scientific claim.