Innovation Mechanism = Voting Mechanism + Prediction Market Mechanism

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Xpree&#8217-s Mat Fogarty (responding to Jed Christiansen, even though Jed didn&#8217-t talk to him but to Emile Servan-Schreiber :-D &#8212-argh, kids, today, interrupting adults&#8217- conversations :-D ):

We have had success combining voting to rank the ideas, then prediction markets to analyze the potential of the top ranked ideas. The phrasing in the prediction market needs to be quite specific, if we invested in idea A, how long would it take to get to market? how much would we sell in the first year? If the company does not invest in idea A, then the money bet in the market is returned to the user.

With long development cycles this can be challenging as it requires keeping the market active until ship, or for the sales estimate, one year after ship.

Of course, you could use a preference market – but this has issues of information cascades and rewarding of group think.


Here&#8217-s the Xpree stuff which Mat is talking about.

Previous blog posts by Chris F. Masse:

  • Since YooPick opened their door, Midas Oracle has been getting, daily, 2 or 3 dozens referrals from FaceBook.
  • US presidential hopeful John McCain hates the Midas Oracle bloggers.
  • If you have tried to contact Chris Masse thru the Midas Oracle Contact Form, I’m terribly sorry to inform you that your message was not delivered to the recipient.
  • “Over a ten-year period commencing on January 1, 2008, and ending on December 31, 2017, the S & P 500 will outperform a portfolio of funds of hedge funds, when performance is measured on a basis net of fees, costs and expenses.”
  • Meet professor Thomas W. Malone (on the right), from the MIT’s Center for Collective Intelligence.
  • Tom W. Bell rebuts the puritan and sterile petition organized by the American Enterprise Institute (which has on its payroll Paul Wolfowitz, the bright masterminder of the Iraq war).

STRAIGHT FROM THE DOUBLESPEAK DEPARTMENT: NewsFutures CEO Emile Servan-Schreiber, well known to chase tirelessly the Infidels who dare calling prediction markets their damn polling system, is eager to sell the confusion to his clients and whomever would listen.

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Emile&#8217-s made up a phrase that means nothing (except in his fertile imagination), &#8220-a proprietary prediction market variant&#8220- &#8212-sounds like a red herring to me.

Unlike Consensus Point, Inkling Markets and Xpree, NewsFutures is the only prediction market software vendor not to have adopted Robin Hanson&#8217-s MSR &#8212-a simplified trading technology now in use in most enterprise prediction markets.

You cant measure the usefulness of a system by how many resources it consumes.

No GravatarMakes sense, doc.

Doc, I didn&#8217-t say that &#8220-this effort by Starbucks somehow implies a devaluation of enterprise prediction markets.&#8221- I said that it implies a devaluation of the enterprise prediction markets that are overhyped as intra-corporation communication tools &#8212-I&#8217-m of course fine with them used as forecasting tools, which is our collective goal from day one (IEM in 1988). The complexity of prediction markets is bearable if and only if they are a bit more accurate than the other mechanisms. Now, if the objective is to get feedback and suggestions from employees, no need to pay for this complexity &#8212-a simple voting mechanism is more than enough and will do the trick.

In that regard, I would point to Xpree, which use that simple, voting mechanism when and where it makes sense to use it.

Mat Fogarty is well versed in the discipline of forecasting, and should be listened to more, here, I believe.

Previous blog posts by Chris F. Masse:

  • Red Herring’s list of the top 100 North-American high-tech startups includes Inkling Markets —but not NewsFutures, Consensus Point, or Xpree.
  • Professor Koleman Strumpf explains the prediction markets to the countryland people.
  • Professor Koleman Strumpf tells CNN that a prediction market, by essence, can’t predict an upset.
  • Time magazine interview the 2 BetFair-Tradefair co-founders, and not a single time do they pronounce the magic words, “prediction markets”.
  • One Deep Throat told me that this VC firm might have been connected with the Irish prediction exchange, at inception.
  • BetFair Rapid = BetFair’s standalone, local, PC-based, order-entry software for prediction markets
  • Michael Moore tells the Democratic people to go Barack Obama in Pennsylvania (a two-tier state), but the polls and the prediction markets tell us that that won’t do the trick.

Xpree, the leader in prediction market forecasting technology for corporations

No GravatarI like Mat Fogarty and Xpree, I think they bring new and needed forecasting competency to the field of prediction markets, but I think that this statement is untrue and thus its author looks a bit childish. I can&#8217-t believe that Mat Fogarty would output such a statement. To say that Xpree is &#8220-the leader&#8221- in this industry segment is like saying that The Dallas Morning News is the biggest newspaper on Earth.

REPLACE IT WITH: &#8230-&#8221-Xpree, the most innovative [*] supplier of prediction market forecasting technology for corporations&#8221-&#8230- that would be closer to the truth&#8230- and less subject to controversy&#8230- and ridicule.

[*] See rhe comments.

UPDATE: Mat Fogarty changed it for &#8220-Xpree, the most awesome prediction market forecasting technology for corporations&#8221-.

Previous blog posts by Chris F. Masse:

  • How Decision Markets Work (with emphasis on InTrade) – by Robin Hanson
  • MIDAS ORACLE POWER: People googling about BetFair’s new bet-matching logic are automatically directed to our group blog. BetFair’s SEO can return to the locker room.
  • David Pennock, a respected expert in prediction markets and market design, discusses some aspects of BetFair’s new bet-matching logic.
  • Inkling Markets has automated the making of the contractual agreement with its prospects. So, now, if you don’t want to, you can avoid talking to Adam “The Shark” Siegel.
  • Google’s Bo Cowgill @ 2008 DIG Conference

Xpree = Innovations + Prediction Markets

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Xpree launches Open Innovation Markets, a simplified betting interface and also a new website.

Open Innovation Markets combines crowd based innovation, voting and prediction markets. The idea is to brainstorm as a community, vote on the ideas to rank them, then forecast key metrics using a market (cost to develop etc). Prediction markets work well for the estimations of unbiased key metrics, combining this with voting allows the crowd to bet on only the top ranked ideas.

In an effort to make truly Usable Markets, we changed from a &#8220-stock trading&#8221- metaphor to a &#8220-betting&#8221- metaphor. In research, we found that players found shorting stock to be a lot less intuitive than going long. With betting, &#8220-I bet $100 that X is lower than 3,000&#8243- is as easy as saying &#8220-I bet $100 that X is higher than 3,000&#8243-, and is a whole lot easier than &#8220-I sell short 10 stock units at an average price of $X, and cover this with $Y&#8221- etc. We have some demos on our site for you to try out. For the prediction market purists out there, we still allow the player to see the underlying prediction market dynamics – no black boxes at Xpree.

Feedback welcome.

prediction markets