—-
—-
– BetFair has been editing Wikipedia 6 times.
– TradeSports-InTrade has been editing Wikipedia 33 times.
– Cantor (the owner of the HSX): 134 times.
– Google (of Bo Cowgill) and Yahoo! (of David Pennock and Daniel Reeves): hundreds of times.
– University of Iowa (the owner of the Iowa Electronic Markets), George Mason University (the working place of Robin Hanson): thousands of time.
– MicroSoft (of Henry Berg): DOZENS OF THOUSANDS OF TIMES.
—-
Wiki Scanner: Search the Wikipedia edits to spot the organizations that edited it. – [One interesting function is temporarily disabled. It would allow us to spot exactly what it is that the firms did edit on a particular Wikipedia page. When this functionality is re-instated, I will write a more detailed blog post.]
Wiki Scanner FAQ
1. Wholesale removal of entire paragraphs of critical information. (common for both political figures and corporations)
2. White-washing —- replacing negative/neutral adjectives with positive adjectives that mean something similar. (common for political figures)
3. Adding negative information to a competitor’-s page. (common for corporations)[…] Overall–-especially for non-controversial topics–-Wikipedia seems to work. For controversial topics, Wikipedia can be made more reliable through techniques like this one. As for other approaches, I think colored text is a promising direction for combating disinformation in wikipedia. […]
List of salacious edits, by Wired
New York Times – Slate
The Wikipedia pages: prediction markets and betting exchanges.
—-
Hence the need for Midas Oracle as an independent and reliable source of information on prediction markets. Here, David Yu, John Delaney, Alex Costakis and company don’-t control what you read.
—-
Previous: WIKIPEDIA CENSORS BETFAIR. –->- Now we can suspect why. See above.
In an extremely leveraged market/economy – without any hard asset collateral like gold – – manipulating information is the same as manipulating prices.
As I’ve said on MO before, PM’s (and/or VM’s) – open up the possibility for information manipulation on top of the various methods used by large players to to manipulate prices that are already in place.
When I was running HSX I got pressure from VC’s to manipulate prices of moviestocks to appease investors and the studios. My refusal to do so led to in intense infighting on the HSX board of directors. The VS tech., as I originally designed it is much more efficient than the current specialist system on the NYSE. But there simply is not any interest in making markets less prone to manipulation; both in the VM’s (virtual markets) as well as the AM’s (analog markets).
In my opinion, the PM’s showing Hilary as a leading candidate for president should be examined closely. I believe that there is wide spread manipulation going on in the PM markets.
Manipulating information which leads to manipulating prices which then leads to more manipulation of information. The story about Cantor and others manipulating info. on Wiki is the just the tip of the iceberg.
“When I was running HSX I got pressure from VC’s to manipulate prices of moviestocks to appease investors and the studios.”
Wow.
The blind spot in the PM industry is to point to results and talk about correlation without stripping out – to what extent – market manipulation produced the ‘predicted’ correlation/results.
For some reason, there is a belief that PM’s are some how ‘cleaner’ than the NYSE? Why? We live in an information based economy. Manipulating info. is the same as manipulating prices. (Murdoch bases his entire career on this). Cantor knows this and they’re shameless about it. What I don’t understand is why they don’t defend the VS patent in the market place – unless of course the fact that the VS tech. (as I designed it) if used properly – REDUCES the possibility for manipulation is not in their interest.
Hmmm….
The New York Times has a story today about corporate “contributions” to Wikipedia being uncovered through Wikiscanner:
From what I understand about the Virtual Specialist technology, it is an automated liquidity provider. If memory serves, it is based on patented technology (your original patent) — one piece of which measures order response to minute increases or decreases in prices, and then adjusts liquidity accordingly. Not to be a contrarian, Max, but wouldn’t any kind of automated specialist technology be a form of price manipulation?
Re: “a form of price manipulation?”
Perhaps under some definitions of price manipulation, but “manipulating prices” to maintain user activity and especially to encourage informed participation, should produce deeper markets and better prices overall. Such a thing is a far cry from jacking up a particular price as a favor to parties interested in a film.
The former actions promote the integrity of the market, while the latter action would destroy it.
re: peter seed –
Michael Giberson is on the right track;
To give one example – (without going into a lengthy dissertation on this); the amount of money coming into the VS/HSX system – via new accounts is a magnitude much higher than is leaving the VS/HSX; therefore, on a universal basis, the amount of cash needed to effect an ‘uptick’ is greater than the amount needed for a ‘downtick’ to avoid runaway inflation. This is a unique aspect of this type of system where all participants are multi-millionaires with an incredibly large combined buying power – in an environment that guarantees market order executions – in a ‘fair and orderly’ way as stipulated by the guidelines established by the NYSE.
The setting of this ‘ratio’ is done on the backend against various benchmarks including, in the case of HSX, historical box office etc.
If you think this anti-capitalist re-read Adam Smith.
Regarding MG’s comment; I fought tooth and nail to keep the VC’s and studio influences (we had NBC sitting on our board after they bought a 20% interest in the company) not to ‘tweak’ prices on individual moviestocks as a way to send a ‘price signal’ to the market that a particular film was ‘tracking well’ and therefore triggering more marketing expenses from studios – from the executives that get this money – to push the film. (executives make their money on movies before they are released, not afterward).
Again, I could go into a lengthy description of this aspect of the story… but I think you get the idea…Obviously it’s a bad idea to have a company like NBC on the board of HSX in ways that give them power over the exchange – but we see the same thing playing out in the banking industry. Is it such a good idea to Hank Paulson – former CEO of Goldman Sachs working as the nation’s Treasury Secretary? ah… NO!!!
What’s the problem?
As I’ve stated here many times, and elsewhere, (like in the pages of the FT etc.) It’s wrong to point to markets as ‘predictive’ as such. (I think the ‘Wisdom of Crowds’ book is problematic in many ways – peddling snake oil in my opinion).
Because you encourage the kind of behavour that I witnessed first hand on the HSX – – and it’s not just Hollywood that will jump in and try to manipulate prices; we see the same thing on the NYSE and in the Federal Reserve system whose attitude is; price signaling is more important than market integrity.
The U.S. gov’t’s ‘working group on financial markets’ that was established after the crash of 1987 (when I was working as a stock broker for Oppenheimer in NYC) completely smashed the idea that markets themselves can be trusted to generate the ‘right’ price.
The WGoFM believed that they knew what the ‘right’ price is for various securities and markets – and they were in the market – and are still in the market – pushing prices around accordingly. The U.S. gov’t itself does not trust markets to act efficiently or in the best interest of all participants.
The incredible crisis we see now in the credit markets is a direct outgrowth of this kind of mistrust in the markets to be able to ‘make a market’ on their own and generate their own price signals.
So, I can’t really blame Hollywood hotshots from thinking that it’s a good idea to ‘adjust’ prices on HSX because they really believe that only they know the ‘right’ price. After all, Hollywood is without a doubt, a monopoly. They think like a monopoly and they saw HSX as a threat to that monopoly (go back and reread why the studios got together to take me off Access Hollywood making BO predictions).
In my opinion, we see a similar abuse of markets in the PM’s with all the action on Hillary Clinton and Obama even though debate after debate, and poll after poll shows that a candidate like Dennis Kucinitch is on fire and on track to serious challenge the status quo. (including market reform… gee, any wonder than that market doesn’t like him?)
Without transparency in the market making machinations of all these virtual markets – we cannot automatically assume that they are not being ‘tweaked’ in various ways.
This is also why I am against the idea of a Pentagon ‘policy analysis market.’ It gives the Pentagon a way to influence behavior in ways that uses the market to show that there is a ‘buy in’ for what they are doing. The pentagon likes the idea of PM’s – – they like PM’s not because they want to make better decision but to use as propaganda. Why would we think otherwise?
I believe in markets. I think they can achieve equitable distribution of both reward and risk across a broad spectrum of an economy in ways that increase the potential for freedom and democracy. Unfortunately, markets have been co-opted by special interest groups like the Pentagon or Hollywood who then poison the debate on issues such as defense and culture and they do this by manipulating either information (as in the wiki scandal) or by outright manipulation in prices.
I also believe there are alternatives. I’m working on a new AMM system now that I hope will advance market making to a new high by making it ’shameless monopolist proof’
…Stay tuned
Interesting post, Max. I like the way you think. Lot’s of issues covered. Let me comment on a couple of them.
I believe in markets, too, and I think the idea of a higher-level AMM is not only feasible but very desirable.
It is ironic to me that “Monopoly” — a game we all grew up on — has a very serious side in the real world. Game versus reality. And we think we know the difference. Hopefully we can agree that there is a difference between a game, where about the worst that can happen is your brother palms a $500 and you draw the card that advances you to a hotel-laden Boardwalk, and real-world financial markets.
I fancy myself as a “pure” capitalist, and I believe that society is basically incapable of attaining it. Greed and power always tug participants toward manipulation of prices and/or data — both of which are equally distructive to fair and orderly markets. If I wanted to make a mission of fixing the system, I would go after the shameless monopolist proof you referenced in your post. But if I wanted to make a game fun, I think I would accept the premise that someone has to shoulder the cost (risk) of increased liquidity and that that notion is desirable if all the players want to experience the action and stay engaged.
I think that Cantor ruined HSX. It’s no longer a fun game. Injecting too much reality has taken the spirit out of it. I personally think that it will continue to be the original PM. But, let’s face it, Max, you could have sold a market-maker interface to every studio in LA and the HSX traders would have thought that those random support-my-movie volatility moves were kinda cool. Some would have even tried to profit from them — at least on paper.
Yo Peter,
Regarding the fun part… This is why the original HSX had roles/avatars like the ‘market maker’ represented by two cartoon sisters (rumored to be lesbian, after all it was Hollywood); we also had Max Broker, and Denise Fine of the Hollywood SEC, plus many other characters that put a face and a personality behind the roles needed to run an economy – each backed up by technology that interacted; the result being fantastic price discovery for prices of virt. securities, interest rates, money supply, discount rates, etc. (most of which was pulled out).
HSX was not only an AMM, but a virtual banker, virtual Fed Reserve (the HRB led by Dr. Zeros, another character) and a virtual treasury.
The zenith of that version was when we were allowing users to cash in their Hollywood dollars at a fixed rate of 1 mn. to one.
We could still maintain a profit – as the money we took in with ads (and other revenue streams) was greater than the money we were paying out with h/dollar conversions i.e., ‘eyeball arbitrage.’ This was my business plan, it was not to sell “research.” My plan was to monitize the eyeballs and the technology to make real money for shareholders, not suck up to studios.
Look at Second Life. It’s a full blown economy. And now there are whole books written about; Is it a ‘real’ economy of a ‘game.’ HSX should be just as big, if not bigger than Second Life.
As there is…. tremendous cross-over between gaming and econometrics. Goldman Sachs and J.P. Morgan’s CDO desks, as we now know, have been trading monopoly money that they created out of thin air. Were they playing a game? Was it really money? It was “money” lent into existence based on mortgage payments coming from homeless people living in boxes. The collateral backing up Goldman’s CDO’s might as well come from people living in Second Life. If it did, it would have more value (tech. stocks are holding up while banking stocks get stoned).
Another reason, in my opinion, that hsx lost its fun factor is because markets are NOT predictive, and we should not take this idea seriously… it only leads to non-fun. I’ll say it again, markets are not inherently predictive and we would never want them to be for a good reason, as you point out, that they would lose liquidity and would cease up.
Again, the problem facing Goldman Sachs and JPM now is that the theory that they could ‘predict’ outcomes is being destroyed (again, as it is with every generation) and we see this invalidation in the form of hundreds of billions of dollars getting shredded around the world as sheepish ‘quants’ admit that, ‘oops, we were wrong.’
Look, if handled correctly, the HSX economy should be bigger than the Hollywood economy (bigger than the 7 bn. in annual box office) and that was my plan… But instead, hsx became a sub-set of Hollywood with the idea that the exchange would provide Hollywood with ‘research.’ Big mistake.
Why would they do such a silly thing (the other board members of hsx that is) Well, presumably this ‘research’ is how Hollywood got hedge funds to invest hundreds of millions in ’slate financing’ recently only to see most of that money get washed out to the Pacific during the great unwinding of 2007.
If HSX has been headquartered in any other city other than Hollywood it would be much bigger than Hollywood. But because it was stuck in H/wood it got consumed by Hollywood.
Dig it.
I have an interest in this area as you may have gathered. I did a stint with a company called uMogul in Santa Monica (you were still at HSX) which was essentially a concept that encouraged Mom and Pop in Peoria to buy shares in a major studio slate of movies for the year. It was based on a studio revenue-share concept. In short: deliver $200 million to Universal in equity money and reap your fair share of the movie profits — your basic point system accounting applied to the little guy. It failed as there was no transparent way to securitize a revenue-share contract and have it fully exchange tradable, but it was fun working with those guys. Enter the hedge funds as you pointed out.
I like the idea of fun-based Second-Life style ecomomy. Fun sells. The opportunity is there for someone who wants to establish the first Second Life stock market. I toyed with the idea, to be honest.
I think that HSX needs to adjust the trading algorithym for more volatility. Fantasy Moguls uses a category called “Ultimate Moguls” based on four variables: box office, reviews, weeks in the top five and per-theater-average. Adding those variables adds volatility and also makes market manipulation more difficult.
One thing that I have have internalized from my experience in the options market is that, in the short term, there is an equal probability of prices of share prices going up as there is in shares going down. So why not have a market pricing algorithym (game version) that uses a random number factor (from 1 to 10) multiplied by the absolute value of the kurtosis of the distribution of the order book (values will be between 0 and 3)? The effect would be to have greater price swings for less liquid stocks. The more volatile nature of the price swings would attract more orders given that virtual traders seek action.
And the world would go round and round….
price swings also text ‘conviction’
we threw random volume at the hsx to see who would ‘jump’ and who had ’strong hands’ – against demographic variables to see – for example, if an african american film would cross over to a white audience… i.e., how much volatility before a white guy sold his ‘urban’ moviestock – and then try to translate that data into future box office…
In an extremely leveraged market/economy – without any hard asset collateral like gold – – manipulating information is the same as manipulating prices.
As I’ve said on MO before, PM’s (and/or VM’s) – open up the possibility for information manipulation on top of the various methods used by large players to to manipulate prices that are already in place.
When I was running HSX I got pressure from VC’s to manipulate prices of moviestocks to appease investors and the studios. My refusal to do so led to in intense infighting on the HSX board of directors. The VS tech., as I originally designed it is much more efficient than the current specialist system on the NYSE. But there simply is not any interest in making markets less prone to manipulation; both in the VM’s (virtual markets) as well as the AM’s (analog markets).
In my opinion, the PM’s showing Hilary as a leading candidate for president should be examined closely. I believe that there is wide spread manipulation going on in the PM markets.
Manipulating information which leads to manipulating prices which then leads to more manipulation of information. The story about Cantor and others manipulating info. on Wiki is the just the tip of the iceberg.
“When I was running HSX I got pressure from VC’s to manipulate prices of moviestocks to appease investors and the studios.”
Wow.
The blind spot in the PM industry is to point to results and talk about correlation without stripping out – to what extent – market manipulation produced the ‘predicted’ correlation/results.
For some reason, there is a belief that PM’s are some how ‘cleaner’ than the NYSE? Why? We live in an information based economy. Manipulating info. is the same as manipulating prices. (Murdoch bases his entire career on this). Cantor knows this and they’re shameless about it. What I don’t understand is why they don’t defend the VS patent in the market place – unless of course the fact that the VS tech. (as I designed it) if used properly – REDUCES the possibility for manipulation is not in their interest.
Hmmm….
The New York Times has a story today about corporate “contributions” to Wikipedia being uncovered through Wikiscanner:
From what I understand about the Virtual Specialist technology, it is an automated liquidity provider. If memory serves, it is based on patented technology (your original patent) — one piece of which measures order response to minute increases or decreases in prices, and then adjusts liquidity accordingly. Not to be a contrarian, Max, but wouldn’t any kind of automated specialist technology be a form of price manipulation?
Re: “a form of price manipulation?”
Perhaps under some definitions of price manipulation, but “manipulating prices” to maintain user activity and especially to encourage informed participation, should produce deeper markets and better prices overall. Such a thing is a far cry from jacking up a particular price as a favor to parties interested in a film.
The former actions promote the integrity of the market, while the latter action would destroy it.
re: peter seed –
Michael Giberson is on the right track;
To give one example – (without going into a lengthy dissertation on this); the amount of money coming into the VS/HSX system – via new accounts is a magnitude much higher than is leaving the VS/HSX; therefore, on a universal basis, the amount of cash needed to effect an ‘uptick’ is greater than the amount needed for a ‘downtick’ to avoid runaway inflation. This is a unique aspect of this type of system where all participants are multi-millionaires with an incredibly large combined buying power – in an environment that guarantees market order executions – in a ‘fair and orderly’ way as stipulated by the guidelines established by the NYSE.
The setting of this ‘ratio’ is done on the backend against various benchmarks including, in the case of HSX, historical box office etc.
If you think this anti-capitalist re-read Adam Smith.
Regarding MG’s comment; I fought tooth and nail to keep the VC’s and studio influences (we had NBC sitting on our board after they bought a 20% interest in the company) not to ‘tweak’ prices on individual moviestocks as a way to send a ‘price signal’ to the market that a particular film was ‘tracking well’ and therefore triggering more marketing expenses from studios – from the executives that get this money – to push the film. (executives make their money on movies before they are released, not afterward).
Again, I could go into a lengthy description of this aspect of the story… but I think you get the idea…Obviously it’s a bad idea to have a company like NBC on the board of HSX in ways that give them power over the exchange – but we see the same thing playing out in the banking industry. Is it such a good idea to Hank Paulson – former CEO of Goldman Sachs working as the nation’s Treasury Secretary? ah… NO!!!
What’s the problem?
As I’ve stated here many times, and elsewhere, (like in the pages of the FT etc.) It’s wrong to point to markets as ‘predictive’ as such. (I think the ‘Wisdom of Crowds’ book is problematic in many ways – peddling snake oil in my opinion).
Because you encourage the kind of behavour that I witnessed first hand on the HSX – – and it’s not just Hollywood that will jump in and try to manipulate prices; we see the same thing on the NYSE and in the Federal Reserve system whose attitude is; price signaling is more important than market integrity.
The U.S. gov’t’s ‘working group on financial markets’ that was established after the crash of 1987 (when I was working as a stock broker for Oppenheimer in NYC) completely smashed the idea that markets themselves can be trusted to generate the ‘right’ price.
The WGoFM believed that they knew what the ‘right’ price is for various securities and markets – and they were in the market – and are still in the market – pushing prices around accordingly. The U.S. gov’t itself does not trust markets to act efficiently or in the best interest of all participants.
The incredible crisis we see now in the credit markets is a direct outgrowth of this kind of mistrust in the markets to be able to ‘make a market’ on their own and generate their own price signals.
So, I can’t really blame Hollywood hotshots from thinking that it’s a good idea to ‘adjust’ prices on HSX because they really believe that only they know the ‘right’ price. After all, Hollywood is without a doubt, a monopoly. They think like a monopoly and they saw HSX as a threat to that monopoly (go back and reread why the studios got together to take me off Access Hollywood making BO predictions).
In my opinion, we see a similar abuse of markets in the PM’s with all the action on Hillary Clinton and Obama even though debate after debate, and poll after poll shows that a candidate like Dennis Kucinitch is on fire and on track to serious challenge the status quo. (including market reform… gee, any wonder than that market doesn’t like him?)
Without transparency in the market making machinations of all these virtual markets – we cannot automatically assume that they are not being ‘tweaked’ in various ways.
This is also why I am against the idea of a Pentagon ‘policy analysis market.’ It gives the Pentagon a way to influence behavior in ways that uses the market to show that there is a ‘buy in’ for what they are doing. The pentagon likes the idea of PM’s – – they like PM’s not because they want to make better decision but to use as propaganda. Why would we think otherwise?
I believe in markets. I think they can achieve equitable distribution of both reward and risk across a broad spectrum of an economy in ways that increase the potential for freedom and democracy. Unfortunately, markets have been co-opted by special interest groups like the Pentagon or Hollywood who then poison the debate on issues such as defense and culture and they do this by manipulating either information (as in the wiki scandal) or by outright manipulation in prices.
I also believe there are alternatives. I’m working on a new AMM system now that I hope will advance market making to a new high by making it ’shameless monopolist proof’
…Stay tuned
Interesting post, Max. I like the way you think. Lot’s of issues covered. Let me comment on a couple of them.
I believe in markets, too, and I think the idea of a higher-level AMM is not only feasible but very desirable.
It is ironic to me that “Monopoly” — a game we all grew up on — has a very serious side in the real world. Game versus reality. And we think we know the difference. Hopefully we can agree that there is a difference between a game, where about the worst that can happen is your brother palms a $500 and you draw the card that advances you to a hotel-laden Boardwalk, and real-world financial markets.
I fancy myself as a “pure” capitalist, and I believe that society is basically incapable of attaining it. Greed and power always tug participants toward manipulation of prices and/or data — both of which are equally distructive to fair and orderly markets. If I wanted to make a mission of fixing the system, I would go after the shameless monopolist proof you referenced in your post. But if I wanted to make a game fun, I think I would accept the premise that someone has to shoulder the cost (risk) of increased liquidity and that that notion is desirable if all the players want to experience the action and stay engaged.
I think that Cantor ruined HSX. It’s no longer a fun game. Injecting too much reality has taken the spirit out of it. I personally think that it will continue to be the original PM. But, let’s face it, Max, you could have sold a market-maker interface to every studio in LA and the HSX traders would have thought that those random support-my-movie volatility moves were kinda cool. Some would have even tried to profit from them — at least on paper.
Yo Peter,
Regarding the fun part… This is why the original HSX had roles/avatars like the ‘market maker’ represented by two cartoon sisters (rumored to be lesbian, after all it was Hollywood); we also had Max Broker, and Denise Fine of the Hollywood SEC, plus many other characters that put a face and a personality behind the roles needed to run an economy – each backed up by technology that interacted; the result being fantastic price discovery for prices of virt. securities, interest rates, money supply, discount rates, etc. (most of which was pulled out).
HSX was not only an AMM, but a virtual banker, virtual Fed Reserve (the HRB led by Dr. Zeros, another character) and a virtual treasury.
The zenith of that version was when we were allowing users to cash in their Hollywood dollars at a fixed rate of 1 mn. to one.
We could still maintain a profit – as the money we took in with ads (and other revenue streams) was greater than the money we were paying out with h/dollar conversions i.e., ‘eyeball arbitrage.’ This was my business plan, it was not to sell “research.” My plan was to monitize the eyeballs and the technology to make real money for shareholders, not suck up to studios.
Look at Second Life. It’s a full blown economy. And now there are whole books written about; Is it a ‘real’ economy of a ‘game.’ HSX should be just as big, if not bigger than Second Life.
As there is…. tremendous cross-over between gaming and econometrics. Goldman Sachs and J.P. Morgan’s CDO desks, as we now know, have been trading monopoly money that they created out of thin air. Were they playing a game? Was it really money? It was “money” lent into existence based on mortgage payments coming from homeless people living in boxes. The collateral backing up Goldman’s CDO’s might as well come from people living in Second Life. If it did, it would have more value (tech. stocks are holding up while banking stocks get stoned).
Another reason, in my opinion, that hsx lost its fun factor is because markets are NOT predictive, and we should not take this idea seriously… it only leads to non-fun. I’ll say it again, markets are not inherently predictive and we would never want them to be for a good reason, as you point out, that they would lose liquidity and would cease up.
Again, the problem facing Goldman Sachs and JPM now is that the theory that they could ‘predict’ outcomes is being destroyed (again, as it is with every generation) and we see this invalidation in the form of hundreds of billions of dollars getting shredded around the world as sheepish ‘quants’ admit that, ‘oops, we were wrong.’
Look, if handled correctly, the HSX economy should be bigger than the Hollywood economy (bigger than the 7 bn. in annual box office) and that was my plan… But instead, hsx became a sub-set of Hollywood with the idea that the exchange would provide Hollywood with ‘research.’ Big mistake.
Why would they do such a silly thing (the other board members of hsx that is) Well, presumably this ‘research’ is how Hollywood got hedge funds to invest hundreds of millions in ’slate financing’ recently only to see most of that money get washed out to the Pacific during the great unwinding of 2007.
If HSX has been headquartered in any other city other than Hollywood it would be much bigger than Hollywood. But because it was stuck in H/wood it got consumed by Hollywood.
Dig it.
I have an interest in this area as you may have gathered. I did a stint with a company called uMogul in Santa Monica (you were still at HSX) which was essentially a concept that encouraged Mom and Pop in Peoria to buy shares in a major studio slate of movies for the year. It was based on a studio revenue-share concept. In short: deliver $200 million to Universal in equity money and reap your fair share of the movie profits — your basic point system accounting applied to the little guy. It failed as there was no transparent way to securitize a revenue-share contract and have it fully exchange tradable, but it was fun working with those guys. Enter the hedge funds as you pointed out.
I like the idea of fun-based Second-Life style ecomomy. Fun sells. The opportunity is there for someone who wants to establish the first Second Life stock market. I toyed with the idea, to be honest.
I think that HSX needs to adjust the trading algorithym for more volatility. Fantasy Moguls uses a category called “Ultimate Moguls” based on four variables: box office, reviews, weeks in the top five and per-theater-average. Adding those variables adds volatility and also makes market manipulation more difficult.
One thing that I have have internalized from my experience in the options market is that, in the short term, there is an equal probability of prices of share prices going up as there is in shares going down. So why not have a market pricing algorithym (game version) that uses a random number factor (from 1 to 10) multiplied by the absolute value of the kurtosis of the distribution of the order book (values will be between 0 and 3)? The effect would be to have greater price swings for less liquid stocks. The more volatile nature of the price swings would attract more orders given that virtual traders seek action.
And the world would go round and round….
price swings also text ‘conviction’
we threw random volume at the hsx to see who would ‘jump’ and who had ’strong hands’ – against demographic variables to see – for example, if an african american film would cross over to a white audience… i.e., how much volatility before a white guy sold his ‘urban’ moviestock – and then try to translate that data into future box office…