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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

Search engine futures!

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Cross posted from Oddhead Blog.

I am happy to report that on my suggestion intrade has listed futures contracts for 2008 search engine market share.

Here is how they work:

A contract will expire according to the percentage share of internet searches conducted in the United States in 2008. For example, if 53.5% of searches conducted in the United States in 2008 are made using Google then the contract listed for Google will expire at 53.5&#8230-

&#8230-Expiry will be based on the United States search share rankings published by Nielson Online.

I think this could be a fascinating market because:

  • Search engine market share is very important to these major companies, with dramatic effects on their share prices.
  • Search engine market share is fluid, so far with Google growing inexorably. However, Microsoft has cash, determination, Internet Explorer, and the willingness to experiment. Ask.com has erasers, 3D, ad budgets, and The Algorithm. Yahoo!, second in market share, often tests equal or better than Google, and new features like Search Assist are impressive.
  • The media loves to write about it.
  • A major search company might use the market to hedge. Well, this seems far-fetched but you never know. Certainly, from an economic risk management standpoint it would seem to make a great deal of sense. (Here, as always on this blog, I speak on behalf of myself and not my company.)

Finally, I have to comment on how refreshingly easy the process was in working with intrade. They went from suggestion to implementation in a matter of days. It&#8217-s a shame that US-based companies are in contrast stuck in stultifying legal and regulatory mud.

The GOP SC and Dem NV Showdown: Intrade v. Zogby

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If McCain wins SC, the GOP contest will be called for Intrade. If Thompson or Romney wins, that contest will be called for Zogby. If any other GOP candidate wins, the contest will end in a draw.

If Obama wins NV, the Dem context will be called for Intrade. If Edwards wins, that contest will be called for Zogby. If H.Clinton or another candidate wins, the contest will end in a draw.

Zogby does not have recent information posted about the GOP in NV nor the Dems in SC, so a meaningful contest with Intrade cannot be had. While it&#8217-s not a forfeiture by Zogby, at least it&#8217-s a tiebreaker for Intrade.

Election eve candidate probabilities posted at Caveat Bettor.

Rushkoff on Crowd Sourcing

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Douglas Rushkoff answering this year&#8217-s Edge question:

The Internet. I thought that it would change people. I thought it would allow us to build a new world through which we could model new behaviors, values, and relationships. &#8230- For now, at least, it&#8217-s turned out to be different. &#8230- The open source ethos has been reinterpreted through the lens of corporatism as &#8220-crowd sourcing&#8221- – meaning just another way to get people to do work for no compensation.

Unfortunately, that&#8217-s close to the truth for most play-money prediction market business plans.

New Hampshire is just another Pentagon moment for political prediction markets

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I think all the excitement over the New Hampshire prediction market prices is creating another &#8220-Pentagon moment&#8221- for the concept. A lot of attention is being paid to prediction markets, and it looks bad, but ultimately it will turn out just fine.

Consider that the criticism is a product of high expectations &#8212- people are complaining that, contrary to expectations, the markets were not better than the polls. People are noticing that prediction markets are not perfect. People all over the place are arguing about prediction markets.

It may look bad, but to me it appears as if there is a broad base of awareness and relatively high expectations out there that wasn&#8217-t evident in the press six months ago. Furthermore, a lot of people who hadn’t thought too much about prediction markets have now had the topic thrust in front of them.

It will turn out more than “just fine” for prediction markets – the market for prediction markets will continue to grow. It may look like a very public black eye, but that is because political prediction markets are now in the fight.

Since Chris must sleep at some time (I think)…

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&#8230- I&#8217-ll alert you to a developing story. [Slate’s Daniel Gross: Why were the political futures markets so wrong about Obama and Clinton?]

Thanks to a friend.

~alex

CNN Political Market officially launches.

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As Chris alluded to a few days ago in a post, we&#8217-ve worked with CNN to launch a marketplace for this election season. A smattering of markets are available now with more to come, I&#8217-m told. So if you like trading in Inkling and want to participate in what I assume will quickly become our largest marketplace (it&#8217-s featured now on http://cnn.com and the inbound traffic is &#8220-remarkable&#8221- to say the least) you can go here: politicalmarket.cnn.com

How will the prediction markets respond?

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Ireland&#8217-s largest bookmaker Paddy Power is already paying out on Barack Obama to win the Democratic nomination for the race to the White House. They decided yesterday to pay out 50000 Euros to punters who had backed him at odds ranging from 4-9 to 4-1.

After his stunning victory last week in the Iowa caucuses, Mr Obama is now odds on favourite at 1-12 to secure the nomination .

Spokesman Paddy Power said: &#8220-With each passing day Obama is looking more like a certainty to get the Democratic vote and, as far as we are concerned, he is already past the post.&#8221-

http://www.bettingmarket.com/