The economics of cheap digital textbooks.

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Introduction

The goal of CNN Political Market is to combine the opinions of a diverse group of people to try and predict the probability of an event occurring or the value of something. Why is this important? Because more often than not, a diverse group of people or “crowd” will generate a more accurate prediction than an individual or a small group of “like-minded” or “single-discipline” folks.

In business, politics, and culture, this can have big ramifications:
- Predictions often turn out to be more accurate than surveys and polls;
- More accurate forecasts affect how marketing dollars are spent, how many widgets should be built in the first run, etc.;
- Decision making is more democratized, giving everyone input where they may not have had it before;
- Markets can serve as on-going indicators for key performance metrics.

Frequently Asked Questions

These are answers to questions we receive on a regular basis.
Q: What if I forgot my username or password?
A: It’s easy, just click here and new information will be sent to the email address we have for you.

Markets and Trading
Q: How do the prices in a market change?
A: Markets are guided by the forces of supply and demand. Every time a user buys a share in a particular idea or outcome, that demand forces the price up a little. The more people buy, the higher the price becomes. If the price gets too high, people will do the natural, self-interested thing and sell their shares to get a profit (or sell shares that they don’t own on credit). Similarly, each time a user sells a share, the price goes back down some.

Q: My math says I can buy more shares than the system lets me. Why?
A: Remember that for each share you buy, the price goes up some. If you’re buying a lot of shares at once, the last share in your order might cost significantly more than the first.

Q: I sold a block of shares, but I got less money out of it than I thought I would.
A: Just like the market price increases you see when you purchase shares, each share you sell drives the market price for those shares down a little. If you’re selling a lot of shares, the last share you sell be worth much less than the first.

Q: I think the current price in a market is reflective of what the market is trying to predict. What do I do now?
A: The best thing to do is to hold onto your shares. If you try to sell them, the market price will start to go down and you won’t make as much profit as you could if you wait for the market to close.

Balances
Q: What is “on credit?”
A: When you sell shares on credit you are betting that the market price of a stock is going to go down instead of up. The idea is to sell shares you don’t have at a high price, and buy them back later once the market price has fallen. You get to keep the difference as profit.

Because you never know how high a price will go up, we’ve set up specific rules for selling shares on credit so you don’t get yourself in to trouble:
- You can buy back shares you bought on credit with the money in your bank.
- There is a limit on how much stock you can sell on credit. You can figure out what that limit is by adding your available balance to the total value of shares you have bought. For example, if you have $10 available balance, and you also own $10 of stock, you can sell $20 of stock on credit. In other words, we try not to allow you to go in to debt by always protecting you against the worst possible scenario.

Q: How can I tell how much money I have?
A: Your balances are listed in the “total assets” box which you can find on your dashboard/portfolio. Your balance is also listed on each market trade page.

Q: How can I get more money?
A: You can earn money by trading wisely in markets. Look for good ideas that are undervalued, examine market descriptions for interesting things that others might not have noticed, or use your own unique, personal knowledge to make predictions that others can’t.

Q: What is the play money good for?
A: Status in the online trading community is based on how much money you have; just take a look at the “top traders.” The more money you have, the sooner everyone will begin to refer to you as “sage.”

Q: Can I give some of my money to another user?
A: Money is non-transferable – you must earn your own by trading.

Marketplace and Help
Q: The website looks a little funny. Is my computer supported?
A: We support the latest versions of Internet Explorer, Firefox, and Mozilla for Windows XP and 2000. For Mac OS X we support the latest versions of Safari, Firefox, and Mozilla. The application may work in alternate OSes and browsers, but we can’t make any promises.

BinarySoft BDIâ„¢ is a revolutionary new way to trade on Betfair. It uses binary prices, which are much better suited for trading than decimal odds and are also the most natural and intuitive way of expressing odds. [*] BDI is compatible with all Betfair markets and is especially suited to markets with two selections – “binary” markets. All of the bets across both selections are combined into a single vertical ladder-style interface, which means that you can place a bet on the outcome of the binary market without having to worry about which underlying selection you should choose in order to place your bet. Popular binary markets on Betfair include the following:
- tennis game/set/match/handicap markets
- snooker frame/match/handicap markets
- football over/under goal markets
- most financial markets

BDI has been designed for maximum performance and is compatible with any operating system which supports Java, including all recent versions of Windows, Mac OS X and Linux. It is easy to install and updates to the latest version automatically each time the program is started. A 20-day FREE trial is available, with absolutely no obligation to buy! BDI continues to evolve at a fast pace, with the latest v2.1 release adding support for multiple-market monitoring, Stop Loss orders, an If-Filled condition and a TIF (Time In Force) parameter. BDI v2.2 is currently in development and has many new features, including: a highly comprehensive charting package; a “zoom-in” mode for more precise trading; a brand new windowing system allowing a more flexible layout; and full integration with Tradefair, the new binary betting exchange from Betfair.

[*] If the 0-100 prices are “better suited for trading”, and more “natural” and “intuitive”, I’d suggest to BetFair that they:

1. scrap their digital-odds trading engine;
2. replace it with the TradeFair trading engine.

But I’m such a “radical”.

Consumer Tech and Entertainment
SYMBOL NAME PRICE CHANGE % CHANGE
APPLEPC iPhone Increases Apple’s Computer Market Share 52.00 1.00 1.96
BLUBY09 Blu-ray vs. HD-DVD Format War 73.75 -0.75 -1.01
DRMRIP Major Record Labels Drop DRM 53.25 0.00 0.00
FCELL Fuel-Cell-Powered Laptop 51.00 0.00 0.00
HDVSBLU HD-DVD Sales 51.75 0.00 0.00
IPHACK iPhone Hack in First Two Months 93.50 -1.75 -1.84
IPRECAL iPhone Recall in First Three Months 13.00 -0.75 -5.45
IPSALES iPhone Sales 66.00 0.25 0.38
LCDVSPLAS LCD vs. Plasma 91.25 0.00 0.00
MACVLINUX Linux vs. OS X Market Share 47.75 0.00 0.00
MADDEN Madden Most Popular Game of 2007 58.50 0.00 0.00
NEWIPOD New Touchscreen iPod 58.50 0.00 0.00
PS3WINS PlayStation 3 Wins Console Wars 25.25 1.00 4.12
SPOREQ2 Spore Released Q2 2008 63.25 0.00 0.00
SUBPC Apple Ultraportable 45.75 0.00 0.00
TRANSF Transformers Summer Box Office 6.00 0.75 14.29
ZUNFON Zune Phone in 2007 42.75 -2.25 -5.00

Military, Aviation & Space
SYMBOL NAME PRICE CHANGE % CHANGE
A380FLIES Commercial A380 Flight in 2007 66.50 -0.50 -0.75
INDIAMN India’s Manned Mission to the Moon 62.50 1.25 2.04
ISSDONE ISS Completed by 2010 39.00 0.75 1.96
LANDR X-Prize Lunar Lander Challenge Success 58.50 0.00 0.00
ORION NASA’s Orion Capsule in Use by 2014 50.00 0.00 0.00
ROCKT Rocket Racing League Starting by 2008 21.25 0.25 1.19
SCRAMJET Scramjet Reaches Mach 15 55.50 5.50 11.00
SEGWIN Winner at the Space Elevator Games 50.00 0.00 0.00
SHUTL Four ISS Shuttle Missions in 2007 41.25 0.75 1.85
SKYDV Skydiving Altitude Record Broken 64.75 0.00 0.00
SPACEX SpaceX Falcon 1 Rocket Launch 57.50 0.00 0.00
SPCHOTL Space Hotel by 2012 40.25 0.25 0.63
V22FLY V-22 Osprey in Active Duty 61.50 0.00 0.00
V22SAFE V-22 Osprey Safe 54.00 0.00 0.00
VRGNFLTS Space Tourism Safety 57.25 0.00 0.00
VRGNGAL Virgin Galactic Launch 55.50 -0.25 -0.45

Extreme Science
SYMBOL NAME PRICE CHANGE % CHANGE
BOSON “God Particle” Discovery in the U.S. 54.00 0.00 0.00
BOTS Androids Beat Humans in Soccer 47.75 0.00 0.00
DIETDRUG OTC Diet Drug Alli Recalled? 45.25 0.00 0.00
NFLHGH NFL Allows Medical Use of HGH 44.75 0.00 0.00
SOLSTRM Solar Storms Cause Massive Blackout 37.00 0.00 0.00
STMCURE Stem Cells Cure Major Disease 86.50 0.00 0.00

Energy and the Environment
SYMBOL NAME PRICE CHANGE % CHANGE
BULBS Compact Fluorescent Lightbulbs Gain Market Share 99.25 0.00 0.00
CO2MKT U.S. Carbon Trading Law 70.75 0.00 0.00
DONGTAN Dongtan Inhabited by 2010 52.00 0.00 0.00
DRYWST Water Crisis In U.S. West 51.50 0.00 0.00
ETHNOL Ethanol’s Long-Term Future 55.00 0.00 0.00
GASTRTY China-U.S. Greenhouse-Gas Treaty 47.25 0.00 0.00
H5N1 Bird Flu in North America 49.25 0.00 0.00
HIGAS Gas Prices Hit Record High 64.25 -2.75 -4.10
HURICAN Major U.S. Hurricane in 2007 88.50 0.00 0.00
OLYMPAIR Air Pollution Postpones Olympics 52.25 -0.25 -0.48
USMPG U.S. MPG Standards Upgraded Again 60.00 -0.50 -0.83
VRGEARTH Virgin Earth Challenge 56.50 0.00 0.00

Web Trends
SYMBOL NAME PRICE CHANGE % CHANGE
DIGGRIP Legal Trouble Shuts Down Digg.com 31.25 0.00 0.00
DOWNLD Future of Video DRM 53.25 0.00 0.00
ERADIO Internet Radio’s Survival 46.00 0.50 1.10
FACEBOOK Facebook.com IPO in ’07 40.75 0.00 0.00
FIREFOX Firefox Market Share 61.25 0.00 0.00
GOOGL Google Overtakes Yahoo 99.75 0.00 0.00
GOOGOS Google OS by 2010 67.00 0.00 0.00
YOUSUE Google vs. Viacom 63.25 0.00 0.00

Automotive Tech
SYMBOL NAME PRICE CHANGE % CHANGE
CHVOLT Chevy Plug-In Hybrid Produced 61.50 0.00 0.00
FLYINGCAR Flying Car by 2025 54.75 0.25 0.46
HYBRID Hybrid Cars More Than 40 Percent of Vehicles Sold 70.50 0.00 0.00

The PopSci’s PPX and The Sim Exchange are the two best things that happened to the field of prediction markets since the arrival of Inkling Markets in 2006.

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Mike Linksvayer, a Macintosh hater, will strongly disapprove, I’m sure.

Apple’s penetration of the geek market over the last five years or so has bugged me … for that long.

And here’s what Mike Linksvayer, answered to Tyler Cowen’s question, “What is your most absurd view?””:

Nearly every user interface and product from Apple has been aesthetically and functionally ugly, from the orginal MacOS to iTunes. I don’t think I can blame Steve Jobs, as NextStep was wonderful. (Yes, I know OS X is derived from NextStep. They ruined it.)