....
The project, known as the Policy Analysis Market, was conceived by Michael Foster, a math and computer science specialist who joined DARPA in 2000 as a program manager, on temporary assignment from the National Science Foundation, according to several people familiar with the project's history. One of his models for creating a market that could help the Pentagon predict events was the political futures market at the University of Iowa, which has proven better than pollsters and pundits in predicting the outcome of presidential elections.

\"DARPA is a relatively entrepreneurial organization,\" said Robin Hanson, an assistant professor of economics at George Mason University, whose work on futures markets also helped inspire Foster. \"They give program managers a lot of discretion and a lot of ability to create new concepts, and then reward them heavily based on how they do.\"
....

\"DARPA is a relatively entrepreneurial organization,\" said Robin Hanson, an assistant professor of economics at George Mason University, whose work on futures markets also helped inspire Foster. \"They give program managers a lot of discretion and a lot of ability to create new concepts, and then reward them heavily based on how they do.\"

According to a chronology prepared by the Pentagon, the go-ahead for the project came in the spring of 2001 from an unidentified official in the Defense Research and Engineering office. After inviting proposals in May 2001, DARPA awarded initial design contracts to two small firms -- Neoteric Technologies of Huntsville, Ala., and Net Exchange of San Diego, a 10-person business started in the early 1990s by economist John Ledyard, Hanson's thesis adviser at the California Institute of Technology.
....