Ideosphere Forum

fx-devel: Fwd: SBIR topic in Electronic Market-Based Decision Support

Author: Ken Kittlitz
Conversation: fx-devel: Fwd: SBIR topic in Electronic Market-Based Decision Support ( prev | next ) reply!
Topic: fx-devel ( prev | next )
Date: Tue May 01, 2001 03:19 pm

Ken Kittlitz

Seems that a lot of people involved with Idea Futures have received this.
Apologies if you've already seen it.

>From: mfoster <>
>Subject: SBIR topic in Electronic Market-Based Decision Support
>Date: Tue, 1 May 2001 16:04:34 -0400
>X-Mailer: Internet Mail Service (5.5.2653.19)
>The Department of Defense has just released a solicitation for research by
>small businesses that may be of interest to you. The whole solicitation can
>be found at
>I am writing to you because you may know of a small business that could
>propose a project in Electronic Market-Based Decision Support, which is one
>of the topics in the solicitation. The topic description is reproduced
>below. Please forward this information to anyone you know who might be
>interested and eligible to propose research in this area.
>PHONE: (703) 696-2245
>FAX: (703) 696-4534
>DARPA SB012-012 TITLE: Electronic Market-Based Decision Support
>KEY TECHNOLOGY AREA: Information Systems Technology
>OBJECTIVE: Develop electronic market-based methods and software for
>decision analysis, to aggregate information and opinions from groups of
>DESCRIPTION: The goal of this SBIR topic is to demonstrate market-based
>methods applied to analyses of interest to the DOD. Strategic decisions
>depend upon the accurate assessment of the likelihood of future events.
>This analysis often requires independent contributions by experts in a wide
>variety of fields, with the resulting difficulty of combining the various
>opinions into one assessment. Market-based techniques provide a tool for
>producing these assessments. Futures markets are used in the commercial
>world to mitigate risks involving the future prices of commodities. As a
>side effect, they can provide accurate predictions of those future prices,
>by aggregating the diverse knowledge and expertise of all market
>participants. Experimental futures markets have been successful in some
>non-financial contexts, such as election predictions. Typically, the market
>maker issues a basket of contracts covering a set of events that is mutually
>exclusive and exhaustive. (In the election context there would be one
>contract for each candidate, which pays off if the candidate wins.) Market
>participants trade the issued contracts freely, buying and selling
>individual contracts through an electronic market. When the outcome is
>known, the market maker pays off only the winning contracts; before the
>outcome is known, the prices reflect market opinion of the probability of
>each outcome. Benefits of market mechanisms like this for aggregating the
>judgment of experts include: incentives to make the best judgments;
>self-selection by the experts themselves of the best-informed market
>participants; and rapid reaction to events that occur during decision
>analysis. These may include analysis of the likelihood of events that
>motivate the Quadrennial Defense Review, prediction of the timing and impact
>on national security of emerging technologies, analysis of the outcomes of
>advanced technology programs, or other future events of interest to the DOD.
> PHASE I: Design one or more markets to predict events in a limited
>domain of interest to the DOD. This will include selection of a domain for
>assessment, identification of a group of knowledgeable market participants,
>design of an incentive system for experts in that domain, integration of
>hardware and software for market operations and management, and
>establishment of an electronic market among the participants.
> PHASE II: Manage the markets established in Phase I until the
>outcomes are known, and analyze their performance. Evaluate the accuracy of
>market predictions against predictions of the same events by other
>institutions. Develop more general techniques and software for motivating
>market participants, trading, managing the market, and extracting
>information from market events. Prepare to establish markets in broader
>PHASE III DUAL USE APPLICATIONS: Technology developed under this SBIR topic
>can be used in strategic analysis for business, technology prediction for
>engineering, and other analyses of decision outcomes. Techniques and
>software for extracting information from market events will be useful in
>commercial analysis of markets in products, services, commodities and
>financial instruments.
>KEYWORDS: Decision Making, Electronic Markets

Ken Kittlitz
VP Development, Javien Canada Inc.


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