It is also likely that when such institutions are available, some will figure out a way to work around them, and some such institutions will be corruptly in league with those they evaluate. By such errors, the marketplace will learn what is important. By such errors, managers of future evaluation-institutions will learn what makes for a good business model.

maybe establishing more such play-money systems would at least get people used to the idea and pave the way for the real thing.

Michael, I’m not hoping for complex hedging instincts, but for direct subsidies of the markets of interest.

Thanatos, thanks for the review.

1) Government funded academic research is highly prone to produce positives. My favorite (or rather least favorite) example is the funding of so-called Gulf War Syndrome research. Those institutions which didn’t find a link to heretofore unknown exotic gases, un-isolatable viruses or common vaccines got paid for their work and then didn’t get any more. Texas Southwestern on the other hand found all sorts of causal links. As a result its researchers have gotten tens of millions of dollars in research money and they continue to churn out junk science that can’t be reproduced elsewhere. Uncle Sam is the number one purchaser, and thus producer of, science for sale – and much, if not most, of it is junk. The worst of it is deadly – see e.g. saturated fat research from the 70s and 80s. In my experience, the more trendy the research the more likely it is to be crap.

2) Fred vom Saal is a nut.

3) The premiss is “BPA was invented by someone looking for a hormone, therefore BPA must a hormone, all hormones are endocrine disruptors, therefore BPA is an endocrine disruptor”. It may even be true – if you are a reading this and you are a certain strain of mouse (but not a rat, guinea pig, dog, monkey or human).

4) The most bizarre aspect of the whole silliness is the belief that the dose response relationship that is the basis of all pharmacology and toxicology is wrong so that the lower the dose, the greater the response. If you like homeopathy you’ll love this scare. PS One funny aspect of their “science” is that if you ban BPA, levels will drop; since lower levels are more toxic (indeed infinitely diluted BPA would produce 100% mortality if you extrapolate from their results) things would only get worse.

5) The Europeans, who are no chemophiles, refused to ban BPA a few days ago.

I’d like to hear somone name one government funded study in which the result was something other than a “politician” pontificating to us on how said study proves that the government needs to reduce our liberties so that the government can protect us from ourselves.

Industry-sponsored research is a whole different story. When a drug company pays for research, they always want to find out that their new drug is safe and effective. No matter how honorable and careful their scientists might be, the fact is that 100% of the sponsorship is hoping for a particular result; for smaller companies, if the drug isn’t found safe and effective, it means there won’t be any money to finish the research. It’s going to be damned hard to keep that from influencing the reported results.

(Note: I’m not arguing against prediction markets or the HEI model; just pointing out that lumping together government- and industry-sponsored research as equally biased is just ludicrous.)

Firstly, my bad in attributing the model choice to Dr. Hanson, rather than to the article, although his classification of it as “wishful thinking” suggests that he agrees with the concept, were it possible.

Secondly, it is naive to think that paid researchers can be insulated from the influence of those who are the source of their pay. This concept has virtually eliminated the possibility of getting accurate medical information from the “thought leaders” in my field, erectile dysfunction. Those professors have gone from a relatively low fixed-salary arrangement (making them among the lowest paid urologic surgeons) provided solely by their universities, to the current “consulting” arrangements for the pharmaceutical and device industry, making them the highest paid of all urologists, some into the millions of dollars annually, while still maintaining their professorships. I am acquainted with all these “thought leaders”; not one thinks he has been influenced by industry. My own professional certifying board cautions all journal readers and all conference attendees: decide for yourself what is true. This is worse than knowing for certain that all of it is false.