# Derren Brown’s lottery win = A split camera trick disguised as “wisdom of crowds”

On 9 September 2009, [British illusionist] Derren Brown conducted a live TV broadcast in which he suggested that he had successfully predicted the winning National Lottery numbers prior to them being drawn. During the broadcast a number of blank lottery balls were displayed on a glass stand in clear view of the camera, and after the lottery draw had been made, the balls were rotated to reveal the winning numbers. It was claimed by Derren Brown that the only other people in the studio were two camera operators, to avoid legal issues, and that the stunt had been authorised by Camelot, the National Lottery operators.

Great Britain is buzzing like crazy about the stunt.

He claimed it was based on an old trick which tells how a crowd of people at a country fair accurately estimated the weight of an ox when their guesses were all averaged out. He gathered a panel of 24 people who wrote down their predictions after studying the last year’s worth of numbers. Then they added up all the guesses for each ball and divided it by 24 to get the average guess. On the first go they only got one number right, on the second attempt they managed three and on the third they guessed four. By the time of last week’s draw they had honed their technique to get six correct guesses, and these were the numbers shown on the Wednesday night programme. [Derren] Brown claims that the predictions were correct because of the “wisdom of the crowd” theory which suggests that a large group of people making average guesses will come up with the correct figure as an average of all their attempts. He also suggested that if the people were motivated by money, it may not work.

Well, we know a lot about the “wisdom of crowds“, here, as Midas Oracle specializes in collective intelligence. The idea of the “wisdom of crowds” is to aggregate bits of information that are dispersed in a population of independently minded individuals. The result of that information aggregation is a predictive power slightly superior (on average, over the long term) to what one single individual can produce —even a gifted one. However, the “wisdom of crowds” is not powerful enough to predict the future with 100% certainty. For that, you would have to reverse the psychological arrow of time —so as to remember the future as opposed to the past. Physicists tell us this is impossible in our universe. Hence, Derren Brown used a trick [WATCH THE 3RD VIDEO BELOW] —and concealed it with some blahblah about the “wisdom of crowds”.

“Check the ball on the right after Derren Brown says ‘23′. Notice it mysteriously jumps up and is slightly higher than the other 5 balls. (apologies for the camera wobble but my camera is on a tripod, the wobble is from the camera on the show which is programmed to wobble so you can’t see the switch of the balls). So no magic, NLP, psychology or mind-tricks. Just good old fashioned camera trickery.

For the tip, thanks to Emile Servan-Schreiber of NewsFutures —we’re impatient to see the new version of their software / prediction market website.

UPDATE:

His next event: Trying to beat the casino.

Another video

Another video

# Derren Browns lottery win = A split camera trick disguised as wisdom of crowds

On 9 September 2009, [British illusionist] Derren Brown conducted a live TV broadcast in which he suggested that he had successfully predicted the winning National Lottery numbers prior to them being drawn. During the broadcast a number of blank lottery balls were displayed on a glass stand in clear view of the camera, and after the lottery draw had been made, the balls were rotated to reveal the winning numbers. It was claimed by Derren Brown that the only other people in the studio were two camera operators, to avoid legal issues, and that the stunt had been authorised by Camelot, the National Lottery operators.

Great Britain is buzzing like crazy about the stunt.

He claimed it was based on an old trick which tells how a crowd of people at a country fair accurately estimated the weight of an ox when their guesses were all averaged out. He gathered a panel of 24 people who wrote down their predictions after studying the last year&#8217-s worth of numbers. Then they added up all the guesses for each ball and divided it by 24 to get the average guess. On the first go they only got one number right, on the second attempt they managed three and on the third they guessed four. By the time of last week&#8217-s draw they had honed their technique to get six correct guesses, and these were the numbers shown on the Wednesday night programme. [Derren] Brown claims that the predictions were correct because of the &#8220-wisdom of the crowd&#8221- theory which suggests that a large group of people making average guesses will come up with the correct figure as an average of all their attempts. He also suggested that if the people were motivated by money, it may not work.

Well, we know a lot about the &#8220-wisdom of crowds&#8220-, here, as Midas Oracle specializes in collective intelligence. The idea of the &#8220-wisdom of crowds&#8221- is to aggregate bits of information that are dispersed in a population of independently minded individuals. The result of that information aggregation is a predictive power slightly superior (on average, over the long term) to what one single individual can produce &#8212-even a gifted one. However, the &#8220-wisdom of crowds&#8221- is not powerful enough to predict the future with 100% certainty. For that, you would have to reverse the psychological arrow of time &#8212-so as to remember the future as opposed to the past. Physicists tell us this is impossible in our universe. Hence, Derren Brown used a trick [WATCH THE 3RD VIDEO BELOW] &#8212-and concealed it with some blahblah about the &#8220-wisdom of crowds&#8221-.

&#8220-Check the ball on the right after Derren Brown says &#8216-23&#8242-. Notice it mysteriously jumps up and is slightly higher than the other 5 balls. (apologies for the camera wobble but my camera is on a tripod, the wobble is from the camera on the show which is programmed to wobble so you can&#8217-t see the switch of the balls). So no magic, NLP, psychology or mind-tricks. Just good old fashioned camera trickery. &#8221-

For the tip, thanks to Emile Servan-Schreiber of NewsFutures &#8212-we&#8217-re impatient to see the new version of their software / prediction market website.

UPDATE:

His next event: Trying to beat the casino.

Another video

Another video

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

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

# eLab eXchange – Which real estate search site will see the most traffic?

The eLab eXchange is up and running again with new markets and more to come on a regular basis!

Spring is the traditional home buying season and many real estate professionals are predicting a significant &#8220-spring bounce.&#8221- Will it happen? Try your hand at predicting the rise (or fall) in web traffic to 5 popular real estate search sites.

If you haven’t visited us lately, come back and see what we’ve got for you to judge: http://elabexchange.com.

Judge right and you can win \$25 and have a chance to win the quarterly mega-prize.

Hope to see you soon,

Lawrence D. Wright, Ph.D.

Research Associate, UCR eLab eXchange

# Are prediction markets useful to you?

It&#8217-s &#8220-pretty clear&#8221- that the prediction markets on political elections aggregate information from the polls &#8212-and from the political experts.

Previously: #1 – #2 – #3 – #4 – #5 – #6

It&#8217-s &#8220-pretty clear&#8221- that:

1. InTrade has been over-selling the predicting power of its prediction markets.
2. The prediction markets are information aggregation systems &#8212-not magical tools.
3. The main benefit of a prediction market is to express an aggregated expected probability. Most of the times, this is of low utility.
4. In complicated situations, this aggregation will contrast well with a poor reporting. In these instances, the prediction market is a useful source of information.

# Robust, the prediction markets are the best mechanism for aggregating information. Thus, companies should use them for assessing strategy and hedging risks.

Via Emile Servan-Schreiber of NewsFutures, John Auters in the Financial Times.

[…] This leads to [Justin Wolfers]&#8216- claim that [prediction markets] are the best way to aggregate information. This is true of any given amount of information. Take three economists and make them trade out a market over their predictions for next month&#8217-s inflation number, he suggests, and they will arrive at a more accurate prediction than a poll of the same three economists. In a market, those with stronger conviction (or inside information) can express that conviction- those less confident will not be willing to stake money. […]

Prediction markets remain subject to the same weaknesses as other markets. The principle of &#8220-garbage in, garbage out&#8221- [*] applies. If there is only poor information to aggregate, they will be as wrong as everyone else. […]

It would make sense to incorporate these odds when making investments. […]

Excellent.

(I don&#8217-t get his micro slam against the wisdom of crowds. Anyway.)

[*] As explained in the prediction market explainer published on the frontpage of Midas Oracle.

# Seems to me that the TradeSports market was reflecting what was happening on the field, rather than predicting it.

Exactly.

See the fist comment, there.

Read the previous blog posts by Chris. F. Masse:

• Five reasons Hillary Clinton should be worried
• TURNING POINT: BARACK OBAMA EVENT DERIVATIVE NOW AHEAD
• The Best External Web Links On Prediction Markets And On Everything Else
• The InTrade webmaster is a moron.
• The Economist rebuts Paul Krugman.
• The US futures exchanges should not control clearing.
• Billionaire Stephen Schwarzman: “I don’t feel like a wealthy person.”