InnovateUs:

Leveraging The Prediction Market

In a traditional stock market stocks are listed for corporations- and people buy and sell these stocks. The decision to buy or sell is based on the percieved performance of the stock in the future. If you think the profits are going to rise you will buy and if you think the profits are on a decline you would sell.

In the InnovateUs Idea Market stocks are listed for ideas and innovations. If you like an idea and you think the idea has a likely chance of getting accepted within your organization, buy the stock for the idea. The better the idea, more stocks you purchase. The total investment in a stock indicates the overall opinion about the idea.

[…] The anonymous Idea creation gave participants the required impetus to freely suggest ideas without fear of embarrassment and negative repercussions. Seeing the opportunity to win some incentives, participants invested their money wisely. In the end, the management ended up with a ton of great ideas and opinions to guide their decisions. […]

Is that &#8220-prediction markets&#8221-, really!??

LinkedIn:

Are there any prediction markets services you would recommend?

Hi all,
I am searching for companies that are specialized in prediction markets. So far I found examples such as newsfutures, nosco, and some more. Have you done business with any of these companies or may there be others you would recommend?
Thanks in advance – Jillian

Jillian Falconi
Innovation Consultant at Saxo Bank

I have answered her request. It&#8217-s a pity I was able to list only three experts in the field of prediction markets. I wanted to give her more names. LinkedIn limits us to three names of experts. Totally stupid&#8230- Sorry to Adam Siegel and Chris Hibbert and others&#8230-

Here&#8217-s the page that this consultant should visit: BEST – the best links about prediction markerts.

Previous blog posts by Chris F. Masse:

• Do join the “Prediction Markets” group at LinkedIn, if you have a strong interest in the prediction markets or if you work in the prediction market industry. It’s free, and that’s a way for the LinkedIn visitors browsing stuff about prediction markets to stumble upon your resume / profile.
• You can now join the LinkedIn group on Prediction Markets.
• Nigel Eccles says that HubDub generates “data on peoples’ reputations for accurately analyzing and forecasting future events”.
• I did drop BetFair from the Midas Oracle coverage of the prediction markets. They should re-establish the direct links, from their 2 frontpages, to the prediction markets on politics, finance, and the other socially valuable issues.
• I dropped BetFair from the Midas Oracle coverage of the prediction markets. They should re-establish the direct links, from their 2 frontpages, to the prediction markets on politics, finance, and the other socially valuable issues.
• I am dropping BetFair from the Midas Oracle coverage of the prediction markets —until they re-establish the direct links, from their 2 frontpages, to the prediction markets on politics, finance, and the other socially valuable issues.
• 2 web links that are not about prediction markets —but which you should check.

Andrew Wing

Variety:

He&#8217-ll work closely with the HSX team to adapt the technology of the virtual stock exchange in developing new products.

TRANSLATION: The current version of the HSX software is stodgy, which may explain why they have only Storage Markets and Pop Sci as clients for their software platform, it seems.

Thanks to Fabian John in Germany for the tip.

Previous blog posts by Chris F. Masse:

• Prediction markets are about lowering transaction costs. That’s how sports come in.
• The birth certificate of the next president of the United States of America –maybe
• The marketing association between BetFair and TOTE Tasmania works better than expected.
• The term “event markets” sucks —and the uncritical thinkers using this crappy term suck too.
• CLIMBING HIS WAY TO THE TOP: Erik Snowberg is now Assistant Professor of Economics and Political Science at California Institute of Technology.
• Unlike other countries, the United States of America defends the freedom to offend in speech.
• The best research papers on prediction markets

Nosco:

A Prediction Market is a virtual share market. It is used to compile information.
1. Two shares are created on the Prediction Market. These shares describe an event, e.g. &#8220-Deadline can be met&#8221- and &#8220-Deadline CANNOT be met&#8221-. Each share pays 100 points if the given event occurs, and 0 points if the event does not occur. Thus, if the deadline is met, the first share pays 100, while the other share is worth nothing.
2. Invited are people who are believed to have relevant knowledge and information to trade in the shares.
3. The participants buy the share that they believe offers them the best chance of making money*. Thus, the price of the share that the majority of participants want to buy will increase- and the price of the share that no one believes in will decrease. In other words, the share price reflects the participants’ overall assessment of whether or not the event will occur.
*The money may be real, virtual or in the form of prizes.

I prefer when there is only one contract. So when you speculate on the &#8220-no&#8221- side of the bet, you simply short-sell the &#8220-yes&#8221- contract.

&#8212-

Chris Hibbert&#8217-s Explainers:

• PM Intro: Basic Formats – [simple double auctions] – by Chris Hibbert – 2005-12-30
• PMs with Open-Ended Prices – [markets with open-ended prices] – by Chris Hibbert – 2006-01-05
• Looking at Both Sides – [the symmetry of complementary purchases] – by Chris Hibbert – 2006-04-17
• Market Design: Book and Market Maker – [how to integrate an order book with an automated market maker] – by Chris Hibbert – 2006-04-28
• Increasing Liquidity in Multi-Outcome Claims – [the mechanics of multi-outcome markets] – by Chris Hibbert – 2006-07-19
• Continuous Outcomes: Bands, Ladders, and Scaled Claims – [predicting the value of a continuous variable] – by Chris Hibbert – 2006-09-20
• Integrating Book Orders and Market Makers – (mirror on MO) – by Chris Hibbert – 2006-09-20
• Conditional and Combinatorial Betting – (mirror on MO) – by Chris Hibbert – 2007-03-06
• Market Makers for Multi-Outcome Markets – (mirror on MO) – by Chris Hibbert – 2007-09-10

There are at least two kinds of prediction market consultants, actually.

#1. The prediction market consultants (a la Emile Servan-Schreiber or Jed Christiansen or Alex Costakis) who help PM-interested executive/managers with the technicalities.

#2. The world-renowned consultants or economists (like Hal Varian or Robin Hanson or Steve Levitt or else) who are uniquely positioned to convince top executives about the social utility of prediction markets as an internal forecasting tool. They command respect in the business world, and mid-level managers can use their support to convince senior managers on setting up a corporate prediction exchange.

Do you, folks, agree with my quick nomenclature??

QUIZZ OF THE DAY: What was the name of the computer in that movie, Space Odyssey?

Previous blog posts by Chris F. Masse:

• The CFTC is going to close the comments in 15 days. We have 15 days left to convince the CFTC to accept FOR-PROFIT prediction exchanges, and counter the evil petition organized by the American Enterprise Institute (which has on its payroll Paul Wolfowitz, the bright masterminder of the Iraq war).
• The CFTC is going to close the comments in 16 days. We have 16 days left to convince the CFTC to accept FOR-PROFIT prediction exchanges, and counter the evil petition organized by the American Enterprise Institute (which has on its payroll Paul Wolfowitz, the bright masterminder of the Iraq war).
• Brand-new scientific report certifies that starting off the Large Hadron Collider is NOT going to destroy the Earth. Glad to hear that. It means that any bets entertained on the LHC issue will be able to be resolved and winnings to be collected in the end.
• Small Business = GOOD — Big Business = BAD
• The letter David Pennock will never send out —well, we hope.
• Monitor the web traffic of TradeSports.com, InTrade.com, BetFair.com, Betdaq.com, NewsFutures.com, HubDub.com, etc. —thanks to Google Trends.
• Here’s the way to promote innovation for entry-order and analysis software packages —separate the 2 functions.