Here’-s a new application of prediction markets now under review for a grant: Prediction Market Journalism.
Here’-s how it works: a journalist in London wants to investigate government plans to fund long-acting reversible contraceptives (LARC) in schools.
The journalist opens an either/or real-money, public prediction market question: Will the government fund LARC for girls in school clinics?
The journalist is interested in questions like: How safe is LARC? What companies make LARC? Which company would supply school clinics with LARC, and why that particular company? Who would profit from LARC distribution in school clinics? What other contraceptives are currently government funded in schools? Both the journalist AND prediction market traders want these questions answered. The former, to publish. The later, to make better market predictions from.
So, in Prediction Market Journalism, traders can help answer these questions. Traders contribute documents, video, photos, tips, links- whatever helps the journalist do the burdensome investigative research. With sufficient vetting, User Generated Content (UGC) is posted for public viewing, thus helping everyone to make better predictions.
In short, PM traders can indirectly effect the market on which they make predictions. Journalists get both crowdsourced investigative research and a percentage of trading commissions.
That’-s a new application of prediction markets.
1. Has citizen journalism demonstrated a continued effort in investigation? Investigation journalism (gathering + analysis) takes days, even weeks, sometimes months. It is costly to do. It should be paid for by a commercial media company or a well funded non-profit organization.
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2. Prediction market traders have the choice between many markets. They will go speculating on those where they can minimize the cost of gathering information and maximizing their profits. The main problem in your proposal is that you don’t separate the traders and the citizen reporters.
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3. Journalists’ ethics will never allow to take a “percentage of trading commissions”. (I am not making a judgment. I am pointing to a fact.)
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4. That said, prediction markets and journalism should co-exist. That’s for sure.
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I like the idea in general and feel that the HubDub market will act as a key driver for the real market. Drivers is what you’ll need and it is this type of good thinking that will determine whether you will be succesful or not.
Personally I would seek the involvement of schools/universities to help us answer some of the tough questions. To students it would be like writing an essay, only this time they get to choose what (specific) information they bring to the table. The teacher would then collect and present all that information and a debate could follow. A collective, consensus type of verdict could be expressed on a HubDub market. You could even have schools competing against each other.
1. There’s an incentive to bring relevant, important or new information to the table as students generally want to show off. Well, with the right educational methodology.
2. Information is being shared.
3. It’s a fun way of doing your homework, and prepares students better for after school life.
4. Students are a cheap source of labor.
5. Many different views and facts will be gathered and presented which has many advantages in itself. And you’d be amazed what people come up with, some of it rubbish, but there will be excellence – for the class to decide which is which.
6. Reporters could tap into that source of information once a project has been completed. Many will not be interested but a smart journalist will have a look anyway and present some of that information as his own work.
7. To have prediction markets within prediction markets could be an interesting concept, and when trying to answer some of the tougher questions, a welcome addition.
Good concept. I gave it a 5.
5 out of XXX?
Chris, in response to your original comment:
1. The problem is that local/metropolitan news organizations don’t have the funds to support investigative journalism anymore. The city newspapers that used to staff investigative journalists simply cannot afford them. So the problem = a lack of local investigative journalism.
Large media companies could fund local investigative journalism, but since their scope is national and international, funding investigative journalism in city matters is not that attractive. Your suggestion that a well-funded non-profit should do the investigative work, like ProPublica does, I totally agree with. Prediction Market Journalism will simply be an alternative model that doesn’t require charitable giving and does include User Generated Content in the process.
You also point out that citizen journalism has not shown a continued interest in investigative journalism. Exactly, that’s the problem. People weren’t interested in paying for music online either until iTunes created a space for it. Prediction Market Journalism hopes to create a space in which citizens DO have a continued interest in investigative journalism.
2. Traders submit tips, documents, video, photos, etc. to the professional journalists working each investigation. I don’t consider traders to be journalists or even ”citizen journalists” because they’re simply contributing what they know. By becoming traders, citizens have a greater incentive to contribute what they know.
3. PM Journalists will NOT trade under any circumstances whatsoever. Those that did would be immediately fired. What the journalist does earn however is a slice of trading commissions. The idea here is to index compensation with market activity, but on this point I appreciate feedback.
4. Thank you
On Chris’s second comment:
The Knight Foundation, to whom I’ve submitted my grant proposal, allows the public to read and rate proposals. So you can rate my proposal 1-5 out of 5. It’s worth noting that anything the Foundation agrees to fund must be open-sourced so if this project is successful, anyone can duplicate it.
By the way, if you’ve already rated my proposal and these comments have influenced your view of the proposal, you can still login and change your rating.
Thanks for running this blog.
William,
Interesting. Would the public’s potential high rating of your proposal be helpful in seducing the jury for this grant?
I would give it a 4- because I believe there are still some issues that need to be addressed.
How to kick-start a market when the issue concerns Londoners formost and doesn’t involve sports. Sounds like a mission impossible to me. On the other hand, the ability to manipulate a market should attract some of the usual suspects (scum) hanging around the exchanges, but brings us to a different issue. The information provided will hardly be objective, it will be dependent on the price in the market and/or the direction the trader wants the price to move.
It smells like more manure to me in a place that already stinks.
Make it a win-win proposition and I will give you a 5.
A high rating does improve the chances of funding.
Though I do not know exactly what rubric the Knight Foundation uses, that the foundation has set up a public rating system does say something about their methodology.
Medemi,
I believe good journalism is a neccesity. Joseph Pulitzer said: “Our Republic and and its press will rise and fall together.”
I understand that British traders are heavily involved in sports trading. Maybe that’s because they don’t see anything else worth participating in, and Prediction Market Journalism will be that thing worth trading on.
Also, you’re assuming PM traders are a fixed body of people. I want news consumers that have never participated in PMs to participate in Prediction Market Journalism. So please recognize that we can actually grow the number of people trading on PMs.
The marketing plan is to partner with a local newspaper in London that has an established brand in journalism, so the pool of traders will grow beyond the current size and demographic.
William,
it’ll be tough. Prediction market people are interested in one thing only, making money.
4 flat now.
Good luck to you.