Idea Futures
I've just finished reading The Future of Work by Thomas W. Malone. I found really interesting the (not so recent, but new for me) idea of prediction markets. [Wikipedia entry: prediction market].
A collection of references can be found here. Also interesting: the Foresight Exchange:
Update: I just read on Slashdot that FX Exchange has just open sourced their code.
Q: What is a prediction market?commerce.net, is developing Zocalo, an open-source framework for performing experiments with prediction markets.
A: A real-money market that floats a prediction (i.e., an event-driven futures contract) and put a 0–to–100 price on that prediction —price that we understand as the probability of this event.
Q: What for?
A: Making running-time probabilistic predictions ("Clinton #42 will be re-elected: 95%." - "Bush #43 will be re-elected: 55%.") —as opposed to fixed-time binary predictions ("Will Bush #43 be re-elected? Yes.").
Q: Does it work?
A: Overall, these market-generated predictions outsmart the polls, the experts and the commentariat —in any topic where information can be aggregated by traders.
Q: Where is that?
A: On Web-based prediction exchanges. Each of these exchanges organizes many prediction markets that generate probabilistic predictions for topics ranging from sports to weather, finance, politics and geopolitical events.
Q: What's next?
A: Science, technology or business predictions. Internal corporate markets. Play-money prediction exchanges. New market designs. Market-generated predictions conditional on other market-generated predictions and that propose or make decisions (i.e., decision markets). CEOs possibly outsmarted and ousted by decision markets. The Republic entirely run thru decision markets —maybe.
A collection of references can be found here. Also interesting: the Foresight Exchange:
At the Foresight Exchange you are able to use your "funny money" (FX-bucks) to bet on the liklihood of future eventsUpdate: two more games based on prediction markets: Yahoo Buzz Game and ProTrade (related to professional athletes).
Update: I just read on Slashdot that FX Exchange has just open sourced their code.





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