Proposal
PAM was to be "a market in the future of the Middle East", and would have allowed trading of futures contracts based on possible political developments in several Middle Eastern countries. The theory behind such a market is that the monetary value of a futures contract on an event reflects the probability that that event will actually occur, since a market's actors rationally bid a contract either up or down based on reliable information. One of the models for PAM was a political futures market run by the University of Iowa, which had predicted U.S. election outcomes more accurately than either opinion polls or political pundits. PAM was also inspired by the work of George Mason University economist Robin Hanson.
Read more about this topic: Policy Analysis Market