CONTACT: GEORGE MCCRORY
300 Plaza Centre One
Iowa City IA 52242
(319) 384-0012; fax (319) 384-0024
Release: March 15, 2002
Company formed at TIC to commercialize prediction markets technology
Four University of Iowa professors who are associated with Iowa Electronic
Markets (IEM) have formed Market Technology Systems LLC (MarTek) to commercialize
prediction market technology.
Through the company located at the UI's Technology Innovation Center (TIC)
on the Oakdale Campus, the professors will operate prediction markets for
businesses and governmental agencies. At its meeting March 13-14, the Board
of Regents, State of Iowa approved the lease at 131 TIC for Market Technology
MarTek was founded by Joyce Berg, Forrest Nelson, George Neumann and Tom
Rietz, who are professors in the UI Tippie College of Business. The concept
of prediction markets, which will be promoted by MarTek, came out of research
in the colleges Iowa Electronic Markets project. The IEM began in 1988
as a research and educational tool, enabling students to trade "shares"
of political candidates or parties, with the payoff depending on the election
results. These markets have been used to predict the outcome of other uncertain
events, such as variations in stock prices or the interest rate target set
by the Federal Open Markets Committee. The markets have been highly accurate
in predicting outcomes, such as the winners of several presidential races.
The IEM will continue to be operated by the Tippie College of Business.
"If markets can be used to predict elections, they can be used to predict
other events, too," said Nelson. "Every business firm and governmental
agency faces uncertainties about future events, uncertainties that hinder
their decision processes. Our clients can use transaction prices from these
markets as indicators of various outcomes and be in a better position to make
In coordination with Neoteric Technologies Inc. of Huntsville, Ala., the
group plans to develop markets for the Department of Defense and related agencies
to predict the outcome of events such as when development of ships, aircraft
or other pieces of military equipment might be completed. Markets could also
be set up to predict outcomes of political events with defense implications,
such as elections in volatile regions or when a peace accord between Israel
and Palestine might be signed.
In the private sector, MarTek and Neotek will seek clients who might want
to predict the development of a new product, the success of contract negotiations,
or completion of a development project on deadline.
With the addition of MarTek, the TIC will have 13 tenant companies. Some
20 TIC "graduate" firms have expanded their business after leaving
the incubator. More than 60 technology companies have been accepted as TIC
tenants since the incubator was established in 1984.
To contact MarTek, call Forrest Nelson at (319) 354 7286.For additional
information about the TIC incubator, contact Tom Bauer, associate director,
at (319) 335-4067.