Robin Hanson’s buddy in the Silicon Valley strikes it rich.

Chris F. Masse July 2nd, 2008

PowerSet sold to the Evil Empire for $100 million.

Barney Pell, then an “Enterpreneur In Residence” for a VC, co-founded PowerSet and became its first CEO —and then moved on to another position at PowerSet. (Barney Pell was probably a minority investor in PowerSet.)

In a 2005 blog post, comes the explanation on how the prediction market virus disseminated into Barney Pell’s body and mind:

I have been interested in this idea ever Robin Hanson (the founder of the field of prediction markets) and I were summer students in the AI Lab at NASA Ames Research Center, both working under Peter Cheeseman. This was right around the time when Robin wrote his first papers on the topic: “Idea Futures: An idea whose time has come?”, and “Could gambling save science?“. In order to match the work its NASA funding, Robin created a demonstration of how a set of Mars Rovers could place bets on the presence of scientific interest at different locations on Mars. The result would be the emergence of consensus beliefs that could be more accurate than the knowledge of any individual.

I also remember the time Robin hosted Murder Mystery evening with a prediction market as an added twist. Like a normal such party, actors would read out each scene. But in Robin’s version, the audience members would then place bets on the identity of the murderer by buying options. Based on the market dynamics, a ticket marked “This ticket is worth $1 if Professor Plum was the murderer” might start out having equal value as the other suspect tickets (so that you could be the whole set of them for $1), but then the price would fluctuate as [events] unfolded until the prices ultimately went to $0 for all but the actual murderer. It was really fun, an improvement on the original version.

Tags: Barney Pell, Microsoft, PowerSet, Robin Hanson

Business , Exchanges & Markets , History
Comments(2)

2 Responses to “Robin Hanson’s buddy in the Silicon Valley strikes it rich.”

# Chris Hibbert on 02 Jul 2008 at 12:30 pm

Another Prediction Market connection for PowerSet is that they were in residence at CommerceNet while I was working there. CommerceNet did some early seed-stage funding for PowerSet, and is likely to also gain from the purchase. I’ve had several good conversations with a few of the people at PowerSet, and they were uniformly positive on Prediction Markets.
# Chris F. Masse on 02 Jul 2008 at 12:45 pm

@Chris Hibbert: Great. More and more business people are aware of prediction markets… We will see many “prediction market startups” in the future… Good…