“Why the many are smarter than the few” is the subtitle of James Surowiecki’s excellent book, The Wisdom of Crowds (buy). The idea is that the accumulated wisdom of many people, each making of a small contribution of knowledge can give better results than the world’s greatest expert – providing their knowledge can be aggregated and they have diverse perspectives, they act independently and are gereally decentralised. Betting markets capture some of these ideas are establishing in politics, showbusiness, technology, global risks, formation of a Palestinian state and Atlantic storms… (see real time odds from NewsFutures below)
The idea was most famously tried by the Pentagon in a truly inspired effort to think about geopolitical futures in an uncertain world – but its Policy Analysis Market was spiked by politicians concerned about “betting on terrorism”.
My favourite is the Long Bets Foundation. This is not quite a betting market, but it does allow a bet on whether “by 2020 bioterror or bioerror will lead to more than one million casualties in a single event” (see here) or “whether by 2050, we will receive intelligent signals from outside our solar system“(here). There is a fascinating list of predictions and predictions that have become bets.