Why CrowdCast ditched Robin Hansons MSR as the engine of its IAM software

Posted on April 29, 2009 by admin

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Chris,

As Emile points out, in 2003 I started experimenting with (and empirically validating) alternatives to the traditional stock-market metaphor that will be more viable in corporate settings. We found the level of confusion and lack of interest in the usual fare led to a death spiral of disuse and inaccuracy. BRAIN was a first stake in the ground in prediction market mechanism design with usability as a fundamental premise.

When I joined Crowdcast (then Xpree) in August of 2008, Mat and the team already recognized the confusion around, and consequent poor adoption of, the MSR mechanism. The number of messages I fielded in my first month here asking me to explain pricing, shorting, how to make money, etc. was astounding. We all knew that we had to start from scratch, and rebuild a mechanism that was easy to use, expressive both in terms of the question one can ask and the message space in which one can answer, and provided a high level of user engagement. We have abandoned the MSR in favor of a new method that users are already finding much simpler and that requires a lower level of participation and sophistication than the usual stock market analogy.

I wish I could go into more detail. However, we need to keep a little bit of a lid on things for our upcoming launch. I can only beg your patience a little while longer, and I hope you will judge our offering worth the wait.

Regards,
Leslie

Nota Bene: IAM = information aggregation mechanism

UPDATE: They are out with their new collective forecasting mechanism.

Flawed New Hampshire polls = Non-accurate New Hampshire prediction markets

Posted on April 28, 2009 by admin

The most comprehensive analysis ever conducted of presidential primary polls:

&#8220-a handful of methodological missteps and miscalculations combined to undermine the accuracy of predictions about presidential primary winners in New Hampshire and three other states.&#8221-

Via Mister the Great Research Scientist David Pennock &#8211-who is an indispensable element of the field of prediction markets.

As I blogged many times, prediction markets react to polls&#8230- See the addendum below&#8230- – [UPDATE: See also Jed’s comment.] – Prediction markets should not be hyped as crystal balls, but simply as an objective and continuous way to aggregate expectations. So, if you think of it, their social utility is much smaller than what the advocates of the &#8220-idea futures&#8221-, &#8220-wisdom of crowds&#8221- or &#8220-collective intelligence&#8221- concepts told us. Much, much, much, much smaller&#8230- They all make the mistake to put accuracy forward. (By the way, somewhat related to that issue, please go reading the dialog between Robin Hanson and Emile Servan-Schreiber.)

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Addendum

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California Institute of Technology economist Charles Plott:

What you&#8217-re doing is collecting bits and pieces of information and aggregating it so we can watch it and understand what people know. People picked this up and called it the &#8220-wisdom of crowds&#8221- and other things, but a lot of that is just hype.

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New Hampshire – The Democrats

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The Hillary Clinton event derivative was expired to 100.

Dem NH Clinton