The Emperor of enterprise prediction markets is naked.
Robin Hanson:
I can confirm that this disinterest is real. For example, when I try to sell firms on internal prediction markets wherein employees forecast things like sales and project completion dates, such firms usually don’t doubt my claims that such forecasts are cheap and more accurate. Nevertheless, they usually aren’t interested.
Topics of interest include but are not limited to:
human computation
social computing
crowdsourcing
wisdom of crowds (e.g., prediction markets)
group memory and problem-solving
deliberative democracy
animal collective behavior
mechanism design
organizational design
public policy design
ethics of collective intelligence (e.g., “-digital sweatshops”-)
computational models of group search and optimization
emergence of intelligence
new technologies for making groups smarter
Thomas Malone is a smart man, and his institution is a great idea. But I can’-t stand that:
Solving Climate Change with CrowdSourcing
I am fed up with the academics who are overselling the wisdom of crowds. Enough already.
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Part 4 is about prediction markets and InTrade.
Part 4 is about InTrade’-s prediction markets:
ABC News, in 2008:
“-The wisdom of crowds”- has apparently seeped a bit into popular culture, or at least the geekier end of it.
On the heels of British illusionist Derren Brown’-s invoking of “-the wisdom of crowds”- as a (false) part of his explanation of how he appeared to predict winning lottery numbers, last night a character in the American TV show House invoked the wisdom of crowds as part of an explanation for how he obtained a diagnosis of his medical condition.
(The character –- a highly intelligent, geeky, successful video game designer –- posted his medical symptoms on the internet and offered $25,000 for a successful diagnosis. Then, mentioning “-wisdom of crowd”- based reasoning, concluded that the most frequent diagnosis appearing in emailed responses was likely correct. As the story turned out, the crowd-sourced diagnosis was incorrect. Instead, the correct diagnosis was submitted by series main character Greg House, working from home after quitting his job at the hospital. The “-wisdom of crowds”- element doesn’-t make it into the official episode summary.)
Although the crowd was wrong (the better to highlight how clever our main character is when, later, he provides the correct diagnosis), at least the basic “-wisdom of crowds”- logic illustrated in the episode was correct. As a fan of the show, I appreciate that it doesn’-t insult my intelligence by dressing up clever cons with misleading science-based patter.
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Derren Brown: How to Win the Lottery (Channel 4 in the U.K.)
On 9 September 2009, [British illusionist] Derren Brown conducted a live TV broadcast in which he suggested that he had successfully predicted the winning National Lottery numbers prior to them being drawn. During the broadcast a number of blank lottery balls were displayed on a glass stand in clear view of the camera, and after the lottery draw had been made, the balls were rotated to reveal the winning numbers. It was claimed by Derren Brown that the only other people in the studio were two camera operators, to avoid legal issues, and that the stunt had been authorised by Camelot, the National Lottery operators.
Great Britain is buzzing like crazy about the stunt.
He claimed it was based on an old trick which tells how a crowd of people at a country fair accurately estimated the weight of an ox when their guesses were all averaged out. He gathered a panel of 24 people who wrote down their predictions after studying the last year’s worth of numbers. Then they added up all the guesses for each ball and divided it by 24 to get the average guess. On the first go they only got one number right, on the second attempt they managed three and on the third they guessed four. By the time of last week’s draw they had honed their technique to get six correct guesses, and these were the numbers shown on the Wednesday night programme. [Derren] Brown claims that the predictions were correct because of the “wisdom of the crowd” theory which suggests that a large group of people making average guesses will come up with the correct figure as an average of all their attempts. He also suggested that if the people were motivated by money, it may not work.
Well, we know a lot about the “wisdom of crowds“, here, as Midas Oracle specializes in collective intelligence. The idea of the “wisdom of crowds” is to aggregate bits of information that are dispersed in a population of independently minded individuals. The result of that information aggregation is a predictive power slightly superior (on average, over the long term) to what one single individual can produce —even a gifted one. However, the “wisdom of crowds” is not powerful enough to predict the future with 100% certainty. For that, you would have to reverse the psychological arrow of time —so as to remember the future as opposed to the past. Physicists tell us this is impossible in our universe. Hence, Derren Brown used a trick [WATCH THE 3RD VIDEO BELOW] —and concealed it with some blahblah about the “wisdom of crowds”.
“Check the ball on the right after Derren Brown says ‘23′. Notice it mysteriously jumps up and is slightly higher than the other 5 balls. (apologies for the camera wobble but my camera is on a tripod, the wobble is from the camera on the show which is programmed to wobble so you can’t see the switch of the balls). So no magic, NLP, psychology or mind-tricks. Just good old fashioned camera trickery. ”
How Derren Brown ‘divined’ the lotto numbers:
For the tip, thanks to Emile Servan-Schreiber of NewsFutures —we’re impatient to see the new version of their software / prediction market website.
Next: Why did illusionist Derren Brown invoke the “wisdom of crowds” in his lottery win explanation?
UPDATE:
His next event: Trying to beat the casino.
Science Of Scams – Advert from Phillis Dorris on Vimeo.