Cancer will be curable before the year 2010!. Whether this is really true, I do not know, but on the Internet market Idea Futures I have just  supported this claim with 50 dollars. There are hundreds of people like me and the chance that cancer will indeed be curable before 2010 is now 50%, which means that half of the gamblers agree with me whereas the other half does not. For many of the participants these bets are more than fun, they are a serious attempt to speed up progress in science, generate money for research and promote honesty in academia. If cancer is indeed curable before the year 2010, we would also make a handsome profit on our betting coupons, were it not that gambling on scientific subjects is illegal in Canada - where the Idea Futures computer is located. Awaiting the establishment of a real Idea Futures market our ability to predict scientific development will be rewarded with 'credibills' - the right to brag!.

I have ignored the pages in the newspapers with the daily rates of the stock exchanges for decades ( just did not understand them) and now I take shares in what you might call the academic variant of the corn futures market, a place in cyberspace where one can gain or lose money not on the future development of corn prices, but on the future development of several issues. Claims vary widely here: from  scientific ones like the time an aids vaccine will be found or the moment that cold fusion will prove practicable to political ones: will China face civil war following the death of Deng Xiaoping and will Tony Blair ever be UK’s prime minister? 

The concept to settle scientific arguments through bets comes from Californian scientist Robin Hanson, who calls it ‘his best idea so far’ to  ‘revive and embellish a suggestion made back during the utopian scientific revolution. Chemical physicians, excluded by the standard physicians from teaching in the British schools, repeatedly offered challenges like the following (circa 1651):

Oh ye Schooles. ... Let us take out of the hospitals, out of the Camps, or from elsewhere, 200, or 500 poor People, that have Fevers, Pleurisies, etc. Let us divide them into halfes, let us cast lots, that one halfe of them may fall to my share, and the other to yours; ... we shall see how many Funerals both of us shall have: But let the reward of the contention or wager, be 300 Florens, deposited on both sides: Here your business is decided’.

Scientific progress now depends on the system of so called ‘peer review’,  which in essence means that when an investigator thinks he has discovered something  he can only publish about it with the consent of  the top scientists in his field.  The thought behind this is that top scientists are super honest and have only the advancement of science in their minds.

Hanson does not believe this: ’Academia is still largely a medieval guild, with a few powerful elite’s, many slave-like apprentices, and members who hold a monopoly on the research patronage of princes and the teaching of their sons. Outsiders still complain about bias, saying their evidence is ignored. Imagine what would happen if we used academic peer review to decide what products to manufacture. Proposals for new products would be reviewed anonymously by powerful people who produce similar products. These reviewers would pass judgment without taking any personal risk, and those judged favorably would win regardless of how useful their product turned out to be’.

The introduction of personal risk in the form of bets would greatly stimulate honesty in science, Hanson thinks. ‘Bets are a long- established and robust reputation mechanism, widely seen as a cure for excessive verbal wrangling; you "put your money where your mouth is". In science and elsewhere, phrases like "you bet" are standard ways to express confidence. Offers to make token bets are particularly compelling, and scientists of equal stature often make and publicize such bets, with recent bets on resource depletion, computer chess, black holes, solar neutrinos, and cold fusion’.

It would go like this. Researcher X visits his professor with a manuscript about his spectacular discovery. The professor does not have the time or the interest to read it, does not understand it or sees  the discovery as a threat to his position. So he says: ’This stuff is not ready for publication yet. There is something wrong with your calculations’.

But after recalculating the researcher is still convinced that he is right. He goes back to his professor who again rejects the material. Now the researcher decides to bypass his professor and start a market with his claim.

He clearly describes his claim, deposits money to pay the people who after 20 years will have to judge who has won the bet and starts to sell coupons with the text: ‘Researcher X is right’. His mother and his close friends will no doubt buy them, but his professor will buy (If he has the guts) coupons with the text ‘Researcher X is wrong’.

During the course of years a market develops. And when after some years a scientific discovery  is made which suggests that researcher X was right, the professor will want to sell his shares, to avoid  losing much more money in the future. If another discovery suggests that researcher X was wrong some of his friends will want to sell their shares. As a result of this continuing trade a substantial capital develops on either side, which makes it attractive for a speculator to fund a scientific experiment that definitely settles the dispute (and make the speculator rich).

And in the case that our researcher was indeed right, there is a big chance that he will also make money with his claim as well  as have his name attached to the discovery.

Though real money is not involved, Mr. James from the University of Calgary where the Idea Futures Internet computer is located, says: "People take it pretty seriously. On computerized mailing lists, investors discuss developments that might affect individual claim prices. And just as in a real market, those prices react quickly to real-world developments. A claim that British Labour Party leader Tony Blair would be the country's next prime minister, for example, fell from 70 cents on the dollar to 50 cents within days of current PM John Major's decision to call a leadership convention-which opened up the possibility that another Conservative MP could succeed him. Sample odds on other claims? Traders are betting that there is a 15 % chance cold fusion will be proven, and a 30% chance that an AIDS vaccine will be discovered by the year 2000’.

The Alberta Research Council uses Idea Futures as a tool for 'technology scanning', 'it is a cheap way to get the opinion of a lot of people’. The Canadians are very proud that their ‘Website’ is one of the most popular on the Internet.( http://if.arc.ab.ca/IF.shtml ).

A real Idea Futures market could also have broader applications. It would, for one, give businesses a greater ability to hedge or minimize risk. Take companies that made Beta video tapes, as an example. They could have bought coupons in a claim that VHS tapes would become the industry standard; when the claim came true, the profits could have helped then replace their now-outdated equipment. The market could also give informed direction to public policy. Rather than having to rely upon the often conflicting warnings about global warming by scientists and environmentalists, for example, politicians might use the change in price of a global warming claim as an indicator of actual concern.

In his publication ‘Could Gambling Save Science?’ Hanson refers to dr. W.K.Hofstee, psychology professor at Groningen University in Holland. Hofstee believes in betting as an instrument to reach a scientific consensus. Before the elections in Holland he advertised to invite people to sent in their prediction of the composition of the new parliament. The most accurate prediction would receive a small amount of money. Hofstee averaged all predictions and showed this average to be much more accurate than the predictions of commercial polling bureaus.

Hofstee is however much less enthusiastic about the introduction of a real money Idea Futures market. ‘Money corrupts’, he says. ‘Commercialization is a threat to science, it invites fraud.’. And upon Hanson’s critique of the peer review system Hofstee replies: ’We must not forget that there are as many quarreling fantasts outside science as there are unreasonable potentates inside’.

Theo Richel (1995)