Posted on Monday, February 26th, 2007 | Bookmark on del.icio.us

Security Markets - Microsoft and March, 2007

by Jose Nazario

A few of us have been exploring the idea of using predictive markets as a means of exploring the realm of information security. Can we predict what kinds of software attacks we’ll see in the coming weeks? Can we leverage the crowd’s wisdom to tell us something? After all, economics markets and options trading already reveal subtleties about the world of finance and business, what about other information pools?Predictive markets are nothing new, in fact they’re popular in politics these days. If you look at the research that has come out of The Iowa Electronic Markets and election prediction, you’ll see what I mean: powerful stuff. So much so that they’re taking off at places like Yahoo!. Trying to capitalize on this is a new website, Inkling Markets. After dabbling with a few friends at setting up a trading space, this ready-made space makes a lot more sense: it let me get right to the chase.

To that end, I’ve created the first of what I hope will be a series of markets trying to predict infosec data. This first one is a simple market, “How many critical vulnerabilities will be addressed by Microsoft in their March, 2007, Security Bulletin cycle?” (link). If you have an account you can log in and begin trading - it’s free, and I already made 107 points on a Dick Cheney trade. A friend points out that maybe a simple over-under market would have been better, which is fair. Next time it’ll be more straightforward, I think. If this goes well, I’ll look at setting up a few more markets, too, for some more long term trading.

market_mar07_s

Begin trading: How many critical vulnerabilities will be addressed by Microsoft in their March, 2007, Security Bulletin cycle? @ Inklink Markets

One Response | Add your own



Comment Post by: Stian Ovrevage — March 6th, 2007 @ 6:28 am EST  Reply

I believe you have a good thing going here Jose.

Still, for this to work over time, there has to be real money involved. After all, that is the primary incentive behind most markets. I’m not quite sure how to explain this, but I think status and reputation instead of real money and your own economic security will lead to unstable and unreliable markets in one way or another.

But of course, I might just as well be wrong. No one knows the exact key to the markets, right? ;-)

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