December 21, 2007

Markets as Solutions for Everything?

An old TIME magazine article that I came across the other day has this to say:

“The power of markets, it turns out, has something to say about practically everything. We see it at work on Wall Street, which absorbs the collected wisdom of millions of investors and expresses it as stock prices. Prediction markets now let people bet on everything from sports scores to election results to the expected capture of al-Qaeda bigwig Abu Mousab al-Zarqawi…

“…Consider the investigation just launched in Washington over an apparent leak at the Department of Homeland Security in which insiders seem to have tipped off relatives about an alleged threat to the New York City subway system. Outrageous behavior? Perhaps. But get those "insider traders" into a market, and everyone will have access to that information. Insiders have a motivation--money, at the basest level--to distribute their knowledge”

Read the rest here.

Certainly an interesting idea and one I do not subscribe to fully. I would be highly interested in the Islamic debates concerning such “prediction markets” given that they are akin to gambling if not gambling itself.

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