Birth of The Sim Exchange + Expansion?

His first blog post:

My name is Brian Shiau. I have been working on applying prediction markets to finance and consulting applications for the past couple of years. My advisors and I have discussed in depth how prediction markets can serve as great information aggregating tools for consulting and market research. However, participants in such prediction markets often get bored and so the markets cannot garner sufficient trading interest to maintain liquid trading and therefore do not predict any useful information.

Instead, I have decided to experiment by launching a prediction market for trading something fun–video games. I’m a gamer myself. I enjoy reading about upcoming games and gauging whether a game will catch enough buzz so that their multiplayer experience will be worthwhile when the game comes out.

I agree 100% with Brian Shiau. Let’s develop prediction exchanges with event derivatives contracts that are fun to trade (sports, movies, games), and once a critical mass is attained, it then becomes possible to trade socially relevant event futures markets.

I said that “vertical prediction exchanges (a la HSX) are performing a better service than vertical lines in a generalist prediction exchange.” I still agree with my self. However, I also said in the past that it is silly to compartmentalize a brand in one industry segment —it’s better to have a brand name that is not heavily linked with one activity; that way, you can easily diversify or branch out, later on.

Here we are today with one big, public, vertical, play-money prediction exchange (the Hollywood Stock Exchange), which size now rivals a financial exchange from a poor country. Is its activity perimeter sealed forever in the movie business? No. Here’s the trick: The HSX publicist could sing the song that “Hollywood” refers, not to the movie business, but to the location of its incorporation. And HSX could go on floating soccer, music, US politics, etc.

Same idea for the Sim Exchange. I see them diversifying, later on —the word “sim” is not too segmenting, in my view.

Anyway.

You can DIGG the Brian Shiau blog post —DIGG.com is a service that uses people to vote for or against stories; that way, only the most popular stories appear on its frontpage.

Brian Shiau’s blog post: An invitation to join the simExchange beta.

By the way, yesterday, Marginal Revolution linked to Midas Oracle .ORG for the seventh or eighth time —I stopped counting.