Tag Archives: software for prediction markets

David Pennock wants you to believe that InTrade needs Robin Hansons automated market maker.

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&#8220-Our market maker automatically adjusts its level of liquidity depending on trading volume. Prices start off very responsive and, as volume increases, liquidity grows, obviating the need to somehow guess the &#8216-right&#8217- level before trading even starts.&#8221-

How that prediction market consultant in Holland attracts economic advisers on the cheap

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Dear Mr. [PROFESSOR’S NAME GOES HERE],

I am writing on behalf of [PREDICTION MARKET SOFTWARE VENDOR’S NAME], a Netherlands based consulting firm, because our research has identified you as a scholar with some expertise in Prediction Markets or a related field. [THEY JUST SCRAPPED MIDAS ORACLE’S LISTINGS] We would like to assess your suitability and interest to join the panel of scientific advisors with [PREDICTION MARKET SOFTWARE VENDOR’S NAME] (www.url.com).

In doing so, we propose to explore your area of experience and knowledge of Prediction Markets. Having established this, we would like to list you as our scientific advisor on your area of expertise on Prediction Markets. This will allow us to seek your services for a negotiated fee, once your particular expertise in developing or interpreting a Prediction Market issue is required.

I trust this message clarifies in short the mutual benefits in our cooperation. Please feel free to contact me to discuss further details.

Sincerely,

[LOW-LEVEL EMPLOYEE’S NAME GOES HERE]
Communications Manager
[PREDICTION MARKET SOFTWARE VENDOR’S NAME]

Enterprise prediction markets: Usability innovation is the answer.

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This past week, The Economist wrote on the yet-unfulfilled promise of prediction markets. At CrowdCast (ex-Xpree), we believe prediction markets are not yet mainstream because the current solutions are built on mechanisms designed for the stock market, not for the enterprise.

The stock trading metaphor works for a large, liquid stock market, but is unsuitable for enterprise forecasting. The concept of shorting and covered calls is far from intuitive for your average employee, and the stock mechanism makes it hard to ask the simplest of questions relevant for corporate forecasters. For example, buying or selling a collection of virtual stocks representing probabilities of sales falling in particular ranges is an incredibly obtuse way of asking for a single sales forecast. Finally, the stock mechanism relies on copious liquidity to ensure meaningful metrics, which is often not available with the limited crowds available in the enterprise.

However, innovation moves on and we question the assumption that prediction markets have to rely on the stock market analogy. At CrowdCast, we have been working on a new mechanism, that takes into account participant behavior and aptitude as much as market efficiency. The product we are launching in April will deliver easy, engaging, and expressive information exchanges, without the limitations of traditional notions of stock markets.

When you get the questions, incentives, and mechanism right, a prediction market can be an incredibly powerful management tool. Employees share insights anonymously and are measured and rewarded for their intelligence. Widely deployed, this has the potential to fundamentally change the nature of the organizational contract, moving from information flow based on hierarchy and silos, to enterprise-wide direct communication.

A whole new take on prediction markets- available from CrowdCast in April 2009.

Mat Fogarty

CrowdCast CEO

Cross-posted from the Xpree blog

Previously: Are collective intelligence solutions being oversold?

Robin Hanson has convinced Concensus Point to support combinatorial prediction markets.

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Robin Hanson:

I&#8217-ve developed a combinatorial betting tech that lets a few or many users edit an always-coherent joint probability distribution over all value combinations of some set of base variables. Far futures base variables might include the years of important tech milestones, population, wealth, or mortality values at particular future dates, etc. Each user edit would be backed by a bet, a bet invested in assets paying competitive interest/returns. This combo bet tech worked well in published lab tests, several firms have used it, and I&#8217-m now working with Consensus Point to deliver a robust commercial implementation. More on the tech here, here, and here.

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See the explainer from David Pennock, which we will link to, again, later on.

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Enterprise Prediction Markets = The wisdom of crowds comes to the enterprise.

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Here are short excerpts of the Forrester report on enterprise prediction markets and companies that provide software for enterprise prediction markets (e.g., Consensus Point &#8211-see the full list of providers at the bottom of this post).

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The Forrester executive summary:

The &#8220-wisdom of crowds&#8221- is capturing the attention of corporate strategists across the globe, and, as a result, many are now looking to prediction markets — speculative markets in which traders collectively predict future events — to generate collective intelligence. For enterprises, prediction markets bring unique value: They focus on the future, aggregate diverse information pools that can be applied to multiple decision-making domains, create streams of actionable data suitable for executive decision-making, and can often cut through corporate politics and pressures at lower cost than traditional forecasting methods. Market researchers will, however, need to have an active hand in the management of these mechanisms, ensuring strong management support, the right incentives for traders, and a focus on appropriate questions. When executed properly, the value to the enterprise is enormous- as a result, Forrester believes that prediction markets will ultimately find a permanent home in the market research toolbox.

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For information on hard-copy or electronic reprints, please contact the Client Resource Center at +1 866.367.7378, +1 617.617.5730, or resourcecenter &#8211-at&#8211- forrester &#8211-dot&#8211- com. We offer quantity discounts and special pricing for academic and nonprofit institutions.

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My remark about the Forester report:

– It&#8217-s a very good document.

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APPENDIX #1: Prediction Markets – DRM Review

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APPENDIX #2:

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Here is a list of companies that provide software for prediction markets:

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Inkling Markets – (MSR + AMM)

NewsFutures – (CDA + optional AMM + SR)

Consensus Point – (CDA + MSR + AMM)

Xpree – (MSR + AMM)

Zocalo – (CDA + MSR + AMM) – (open-source)

Nosco – (CDA + MSR + AMM)

QMarkets – (MSR + AMM)

Ask Markets – (MSR + AMM)

Exago Markets – (CDA + optional AMM)

Gexid – (?)

ProKons – (?)

Spigit – (?)

HSX Virtual Markets – (Virtual Specialist + AMM)

HubDub – (MSR + AMM) – (not licensed)

Yahoo!&#8217-s Prediction Exchange – (MSR + AMM + DPMM) – (not licensed)

Google&#8217-s Prediction Exchange – (CDA) – (not licensed)

MicroSoft PredictionPoint – (MSR + AMM) – (not licensed)

InTrade – (CDA + AMM for play money) – (not licensed)

TradeSports – (CDA + AMM for play money) – (not licensed)

Iowa Electronic Markets – (CDA) – (not licensed)

HedgeStreet – (CDA) – (not licensed)

TradeFair – (CDA) – (not licensed)

BetFair – (CDA) – (not licensed)

Trading Technologies International – (CDA) – (not for event derivatives)

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Here&#8217-s a list of prediction market consultants:

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Robin Hanson – (George Mason University, Virginia, U.S.A.)

  • Robin Hanson does prediction market consulting work, and have no exclusive arrangements.
  • &#8220-I&#8217-m more interested in helping groups that want to add lots of value to big decisions, versus groups that just want to dabble in a new fad.&#8221-

Inkling – URL: Inkling Markets – (Chicago, Illinois, U.S.A.)

  • Adam Siegel
  • Nathan Kontny

NewsFutures – (Maryland, U.S.A. &amp- Paris, France, E.U.)

  • Emile Servan-Schreiber — Post Archive at Midas Oracle
  • Maurice Balick

Consensus Point – (Nashville, Tennessee, U.S.A. &amp- Calgary, Alberta, Canada)

  • David Perry
  • Ken Kittlitz, who co-founded the Foresight Exchange in 1994.

Xpree – (California, U.S.A.)

  • Mat Fogarty

Chris Hibbert – (California, U.S.A.)

  • Chris Hibbert (Software architect / Zocalo project manager) — Post Archive at Midas Oracle
  • Chris Hibbert&#8217-s personal website — Chris Hibbert&#8217-s personal blog —
  • Chris Hibbert&#8217-s CommerceNet profile — (His stint there ended in mid 2006.)

Justin Wolfers – (University of Pennsylvania&#8217-s Wharton Business School, Pennsylvania, U.S.A.)

  • Justin Wolfers takes on prediction market consulting work.
  • The prediction market industry is &#8220-a case where the interaction between firm practice and academic research are reasonably close.&#8221-

Koleman Strumpf – (University of Kansas, Kansas, U.S.A.)

  • Koleman Strumpf — Post Archive at Midas Oracle
  • Koleman Strumpf can be approached to consult on prediction market projects.
  • &#8220-Prediction markets help harness the knowledge of diverse groups. They have great potential as a tool for industry.&#8221-

Nosco – (Danemark, E.U.)

  • Jesper Krogstrup
  • Oliver Bernhard Pedersen

Qmarkets – (Israel)

  • Noam Danon

Ask Markets – (Greece, E.U.)

  • George Tziralis — Post Archive at Midas Oracle

HP Services &amp- HP Labs – (U.S.A.)

  • Predicting the future &#8211-with games — Introductory article
  • Information Dynamics Lab — Internal prediction markets
  • BRAIN – (Behaviorallly Robust Aggregation of Information in Networks) — Scoring Rules (i.e., non-trading technique)
  • Bernardo A. Huberman – Bernardo Huberman – Senior Fellow &amp- Director
  • Kay-Yut Chen –
  • Google Search for &#8220-prediction markets&#8221-

Hollywood Stock Exchange (HSX) &amp- HSX Research – (L.A., California, U.S.A.)

  • Prediction market consultancy firm
  • Movie business

IntelliMarket Systems – (L.A., California, U.S.A.)

  • Charles R. Plott – Charles Plott – (CalTech Inst., California, U.S.A.)

Gexid – Global Exchange for Information Derivatives – (Germany, E.U.)

  • Bernd Ankenbrand — Post Archive at Midas Oracle

ProKons – (Germany, E.U.)

  • Peter Gollowitsch

Exago Markets – (Portugal, E.U.)

  • Pedro Da Cunha

NimaniX – (Israel)

  • Elad Amir (CEO), Littal Shemer Haim (VP Business development), David Shahar (VP R&amp-D)

Michael Giberson – (Texas, U.S.A.)

  • Michael Giberson (Energy Economist – Center for Energy Commerce, Rawls College of Business, Texas Tech University) — Post archive at Midas Oracle
  • Knowledge Problem – Blog on economics, energy policy, more.

Other Consulting Firms

McKinsey – (U.S.A.)

  • Google Search for &#8220-prediction markets&#8221-
  • The Promise Of Prediction Markets – by McKinsey – 2008-04-XX

Accenture – (U.S.A.)

  • Google Search for &#8220-prediction markets&#8221-

Gartner – (U.S.A.)

  • Google Search for &#8220-prediction markets&#8221-

Forrester – (U.S.A.)

  • Google Search for &#8220-prediction markets&#8221-
  • Prediction Markets: Wisdom Of The Crowd Comes To The Enterprise. – 2008-07-14

The Boston Consulting Group – (U.S.A.)

  • Google Search for &#8220-prediction markets&#8221-

CapGemini – (U.S.A.)

  • Google Search for &#8220-prediction markets&#8221-

KPMG – (U.S.A.)

  • Google Search for &#8220-prediction markets&#8221-

Price Waterhouse Cooper – (U.S.A.)

  • Google Search for &#8220-prediction markets&#8221-

Ernst &amp- Young – (U.S.A.)

  • Google Search for &#8220-prediction markets&#8221-

Deloitte – (U.S.A.)

  • Google Search for &#8220-prediction markets&#8221-

IBM – (U.S.A.)

  • Google Search for &#8220-prediction markets&#8221-

EDS – (U.S.A.)

  • Google Search for &#8220-prediction markets&#8221-

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