Comments on: Merger Markets on Microsoft-Yahoo http://www.midasoracle.org/2008/02/02/merger-markets-on-microsoft-yahoo/ Prediction Markets For All Mon, 01 Dec 2008 19:58:07 +0000 http://wordpress.org/?v=2.6.5 By: Mystification, demystification, value assessment, and prediction markets | Midas Oracle .ORG http://www.midasoracle.org/2008/02/02/merger-markets-on-microsoft-yahoo/#comment-21967 Mystification, demystification, value assessment, and prediction markets | Midas Oracle .ORG Fri, 03 Oct 2008 08:05:43 +0000 http://www.midasoracle.org/2008/02/02/merger-markets-on-microsoft-yahoo/#comment-21967 [...] PREVIOUSLY: See Robin Hanson’s take on Google’s enterprise prediction markets. [...] [...] PREVIOUSLY: See Robin Hanson’s take on Google’s enterprise prediction markets. [...]

]]> By: Information Value of Enterprise Prediction Markets | Midas Oracle .ORG http://www.midasoracle.org/2008/02/02/merger-markets-on-microsoft-yahoo/#comment-21888 Information Value of Enterprise Prediction Markets | Midas Oracle .ORG Thu, 25 Sep 2008 16:11:04 +0000 http://www.midasoracle.org/2008/02/02/merger-markets-on-microsoft-yahoo/#comment-21888 [...] PREVIOUSLY: See Robin Hanson’s take on Google’s enterprise prediction markets. [...] [...] PREVIOUSLY: See Robin Hanson’s take on Google’s enterprise prediction markets. [...]

]]> By: A highly accurate prediction market has little value if other mechanisms can provide similar accuracy at a lower cost, or if few substantial decisions are influenced by accurate forecasts on its topic. | Midas Oracle .ORG http://www.midasoracle.org/2008/02/02/merger-markets-on-microsoft-yahoo/#comment-17702 A highly accurate prediction market has little value if other mechanisms can provide similar accuracy at a lower cost, or if few substantial decisions are influenced by accurate forecasts on its topic. | Midas Oracle .ORG Thu, 27 Mar 2008 07:47:54 +0000 http://www.midasoracle.org/2008/02/02/merger-markets-on-microsoft-yahoo/#comment-17702 [...] Robin Hanson: […] I meant trying to field the highest value applications. That is naturally measured in accounting terms - value minus cost. Measures of popularity or familiarity would not at all be the same thing. [...] [...] Robin Hanson: […] I meant trying to field the highest value applications. That is naturally measured in accounting terms - value minus cost. Measures of popularity or familiarity would not at all be the same thing. [...]

]]> By: Robin Hanson http://www.midasoracle.org/2008/02/02/merger-markets-on-microsoft-yahoo/#comment-16810 Robin Hanson Tue, 05 Feb 2008 04:18:52 +0000 http://www.midasoracle.org/2008/02/02/merger-markets-on-microsoft-yahoo/#comment-16810 I can't have much optimism about a business practice whose proponents aren't even willing to try to offer a cost-benefit calculation. You could count how many employees had ever gone to a TQM meeting, but that wouldn't tell you if TQM is valuable or not. I can’t have much optimism about a business practice whose proponents aren’t even willing to try to offer a cost-benefit calculation. You could count how many employees had ever gone to a TQM meeting, but that wouldn’t tell you if TQM is valuable or not.

]]> By: Chris. F. Masse http://www.midasoracle.org/2008/02/02/merger-markets-on-microsoft-yahoo/#comment-16807 Chris. F. Masse Mon, 04 Feb 2008 21:28:15 +0000 http://www.midasoracle.org/2008/02/02/merger-markets-on-microsoft-yahoo/#comment-16807 I have publicized the Wikipedia link, as you ordered, my good Lord. :-D http://www.midasoracle.org/2008/02/04/information-value/ I have publicized the Wikipedia link, as you ordered, my good Lord. :-D
http://www.midasoracle.org/200.....ion-value/

]]> By: Bo Cowgill http://www.midasoracle.org/2008/02/02/merger-markets-on-microsoft-yahoo/#comment-16803 Bo Cowgill Mon, 04 Feb 2008 19:59:42 +0000 http://www.midasoracle.org/2008/02/02/merger-markets-on-microsoft-yahoo/#comment-16803 If you re-read my comment again, you will see that I did not say anything about the popularity of the markets. I proposed measuring the number of employees working in a job that has a prediction market on it. This is a function of the firms decision to implement markets on a wide variety of relevant topics for the business. I know this is a heuristic, and there would be greater value in trying to measure the value added in dollars. However, a monetization study is likely to be 1) more time consuming to produce, and 2) just as unreliable. We aren't likely to get honest answers from people by asking them to estimate the value of additional information at various specific hypothetical moments in the past. People are not good at making these type of estimations, especially when there is no incentive to get it right (and a lot of reasons to get it wrong). On the costs side: Even if we had good data about how much individual employees were spending on the site browsing, etc -- it is unclear how to price such their time. Is it work, or is it leisure? Should we model this as employees having an hourly rate (even though most are salaried)? I know you had some thoughts on this before which I don't remember (do feel free to share), but I'm not convinced these issues can be resolved in a persuasive way. Once people realize what's going on with the methodology of such research, they'll realize what a totally hackable and unreliable study it is -- and it will lose its persuasive value at Google as well as externally. In summary: Doing a value-of-information calculation on prediction markets itself does not seem to offer very much information value. Because of the low rigor, it would offer little additional persuasive value at a great cost. Also, just wanted to drop <a href="http://en.wikipedia.org/wiki/Value_of_information" rel="nofollow">this link for Chris</a>, who seems to think that you invented value-of-information calculations in the shower one morning a few weeks ago and released it to the world via Midas Oracle. If you re-read my comment again, you will see that I did not say anything about the popularity of the markets. I proposed measuring the number of employees working in a job that has a prediction market on it. This is a function of the firms decision to implement markets on a wide variety of relevant topics for the business.

I know this is a heuristic, and there would be greater value in trying to measure the value added in dollars. However, a monetization study is likely to be 1) more time consuming to produce, and 2) just as unreliable.

We aren’t likely to get honest answers from people by asking them to estimate the value of additional information at various specific hypothetical moments in the past. People are not good at making these type of estimations, especially when there is no incentive to get it right (and a lot of reasons to get it wrong).

On the costs side: Even if we had good data about how much individual employees were spending on the site browsing, etc — it is unclear how to price such their time. Is it work, or is it leisure? Should we model this as employees having an hourly rate (even though most are salaried)? I know you had some thoughts on this before which I don’t remember (do feel free to share), but I’m not convinced these issues can be resolved in a persuasive way.

Once people realize what’s going on with the methodology of such research, they’ll realize what a totally hackable and unreliable study it is — and it will lose its persuasive value at Google as well as externally.

In summary: Doing a value-of-information calculation on prediction markets itself does not seem to offer very much information value. Because of the low rigor, it would offer little additional persuasive value at a great cost.

Also, just wanted to drop this link for Chris, who seems to think that you invented value-of-information calculations in the shower one morning a few weeks ago and released it to the world via Midas Oracle.

]]> By: Robin Hanson http://www.midasoracle.org/2008/02/02/merger-markets-on-microsoft-yahoo/#comment-16801 Robin Hanson Mon, 04 Feb 2008 14:21:28 +0000 http://www.midasoracle.org/2008/02/02/merger-markets-on-microsoft-yahoo/#comment-16801 Bo, my "serious" I said I meant trying to field the highest value applications. That is naturally measured in accounting terms - value minus cost. Measures of popularity or familiarity would not at all be the same thing. Bo, my “serious” I said I meant trying to field the highest value applications. That is naturally measured in accounting terms - value minus cost. Measures of popularity or familiarity would not at all be the same thing.

]]> By: Bo Cowgill http://www.midasoracle.org/2008/02/02/merger-markets-on-microsoft-yahoo/#comment-16798 Bo Cowgill Mon, 04 Feb 2008 05:01:02 +0000 http://www.midasoracle.org/2008/02/02/merger-markets-on-microsoft-yahoo/#comment-16798 We don't have good indicators or definitions of whether 'companies are serious.' You're not being helpful by pointing out that PMs aren't being used for everything in corporations, or even the applications that seem obvious to you. Lets think about things we might be able to measure. For example, we might be able to measure the % of employees at a company who have had a prediction market run on a topic directly relevant to their day-to-day job. Without disclosing the topics: If there are a lot of employees working on projects related to the markets, it may be safe to assume that markets are being run on important topics for the company. What % would you select? We don’t have good indicators or definitions of whether ‘companies are serious.’ You’re not being helpful by pointing out that PMs aren’t being used for everything in corporations, or even the applications that seem obvious to you.

Lets think about things we might be able to measure. For example, we might be able to measure the % of employees at a company who have had a prediction market run on a topic directly relevant to their day-to-day job. Without disclosing the topics: If there are a lot of employees working on projects related to the markets, it may be safe to assume that markets are being run on important topics for the company.

What % would you select?

]]> By: Robin Hanson http://www.midasoracle.org/2008/02/02/merger-markets-on-microsoft-yahoo/#comment-16797 Robin Hanson Mon, 04 Feb 2008 03:12:17 +0000 http://www.midasoracle.org/2008/02/02/merger-markets-on-microsoft-yahoo/#comment-16797 Bo, I said <i>companies</i> were not serious, not the employees. I am happy to grant that you personally are serious. I will similarly grant that no university I know is serious about finding the highest value applications of prediction markets, including my university. Even more than high tech companies, universities are far more interested in associating with cool tech than in risking disruptions by actually applying it internally. Bo, I said companies were not serious, not the employees. I am happy to grant that you personally are serious. I will similarly grant that no university I know is serious about finding the highest value applications of prediction markets, including my university. Even more than high tech companies, universities are far more interested in associating with cool tech than in risking disruptions by actually applying it internally.

]]> By: Bo Cowgill http://www.midasoracle.org/2008/02/02/merger-markets-on-microsoft-yahoo/#comment-16796 Bo Cowgill Mon, 04 Feb 2008 02:12:52 +0000 http://www.midasoracle.org/2008/02/02/merger-markets-on-microsoft-yahoo/#comment-16796 Robin: Last time I bumped into you, you were talking about implementing a market about which applicants would be getting into schools. No offense intended, but I took this as evidence that you just aren't serious about finding the highest value applications of prediction markets. The high stakes in academia are articles published, faculty appointments, departmental budgets, salaries and donations to endowments. Where is your market for those? Not to mention: Suppsedly you "invented" prediction markets, and you're only now getting around to setting them up in your own domain? I'm starting to wonder if you're just trying to look cool, or if you're "serious" about trying to find the highest value prediction markets. Robin: Last time I bumped into you, you were talking about implementing a market about which applicants would be getting into schools.

No offense intended, but I took this as evidence that you just aren’t serious about finding the highest value applications of prediction markets.

The high stakes in academia are articles published, faculty appointments, departmental budgets, salaries and donations to endowments. Where is your market for those? Not to mention: Suppsedly you “invented” prediction markets, and you’re only now getting around to setting them up in your own domain?

I’m starting to wonder if you’re just trying to look cool, or if you’re “serious” about trying to find the highest value prediction markets.

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