The Dawn of Information Markets
"The stillbirth of Vice Admiral John M. Poindexter's proposal for a market in terrorism futures could have a chilling effect on one of the Internet's most important potentials -- the use of information markets to aggregate and codify distributed intelligence.
Historically, most markets have been created to make money with information as a byproduct. In large part enabled by the Internet, markets in recent years have been created for the express purpose of ferreting out and organizing information.
The best known is the Iowa Electronic Markets at the University of Iowa, especially its Presidential Election Vote-Share Market. Since its inception in 1988, this pre-Internet information market has successfully predicted the outcome of every U.S. presidential election. It's more accurate than traditional polling techniques in predicting the outcome of U.S. and foreign elections, primaries, and other political events. In fact, in tight elections, professional bond traders, who often have millions of dollars riding on post-election economic policies, monitor the Iowa political stock market as a leading indicator."