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Google's Prediction Market
Posted by
CmdrTaco
on Mon Jan 07, 2008 10:20 AM
from the i-predict-nothing dept.
from the i-predict-nothing dept.
Googling Yourself writes "Employees at Google are encouraged to place bets on Google's prediction market — an exchange that tries to forecast events based on the money wagered on a particular outcome. Employees have made wagers with play money (Goobles, as in rubles) on questions like: will Google open a Russia office? will Apple release an Intel-based Mac? how many users will Gmail have at the end of the quarter? One tangible benefit to the company is that the market allows Google to track how information disseminates in the company. A paper called "Using Prediction Markets to Track Information Flows: Evidence From Google" discusses information flows in the company based on the prediction market data and contains many other interesting observations of Google culture. (pdf)"
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I predict... (Score:2)
a beta version hitting the Intarweb tubes soon...
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Worldwide for free: inkling (Score:5, Informative)
Re:Worldwide for free: inkling (Score:5, Informative)
Parent
I'm suddenly skeptical (Score:3, Insightful)
I don't need Intrade to tell me what's happening at the polls; I can get that from the news. Intrade is interesting only if it's able to make predictions, and for a long time Clinton was twice as expensive as Obama. Today it's the reverse. That makes it a fine place to gamble, but not an interesting place to get an accurate representation of the future.
That market is sti
Re:I'm suddenly skeptical (Score:4, Interesting)
Parent
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The thing you have to understand about prediction markets is they don't represent a magical source of extra information. Prediction markets work only based on information that is already publicly available. They simply combine and weigh that information better than any other method of making predictions, an
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If you're not betting real money then you lose a lot of the motivation to be completely honest about the odds.
I'm surprised (Score:3, Funny)
My Bet (Score:5, Funny)
I'm betting yes. So when do my stock options arrive?
Like Popular Science (Score:4, Informative)
Employee Games the system (Score:4, Interesting)
I wonder if he got fired or got a raise?
Re:Employee Games the system (Score:4, Funny)
Maybe he just got a commendation for original thinking.
steveha
Parent
I wonder (Score:4, Funny)
Information, not crystal ball (Score:5, Insightful)
The best example is that the prediction markets predicted Hillary would win the Democratic nomination by a wide margin. Now the consensus is that it will be Obama by a wide margin.
Re:Information, not crystal ball (Score:5, Interesting)
One thing I'm interested in seeing is how Candidate/Party X's chance of winning correlates with critical financial metrics like long-term interest rates and oil prices. That is, do traders revise their estimates as a party's chance of winning goes up? Intrade recently started "shock future" bets where you can bet on the changes in such variables on election day (although I think to avoid the noise you should instead look at the long-term correlation rather than one day, which has noise from other factors).
For all their flaws, prediction markets truly fascinate me.
Parent
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Prediction markets are only as accurate as their population. Those with small populations or with populations heavily influenced by one demographic do not necessarily represent the country as a whole. Also, since most of them are treated like a stock market, there are those that are taking larger risks just to try to win the "game".....and they have n
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Perhaps it won't be applied to prediction markets, and perhaps it won't be applied to individual bettors. On the other hand, if said risk were traded on a prediction market, we would know just how risky betting in a prediction market is.
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Re:Information, not crystal ball (Score:4, Insightful)
Did you notice the day after Obama did well in Iowa, there was a sudden storm front that hit the west coast?
He's running a Godless campaign, it happens most election years.
[hint: The market tanks because of a jobs report that came out from the labor dept]
Parent
Re:Information, not crystal ball (Score:4, Insightful)
They don't "force people to be honest". Prediction markets — if they are positioned to influence the events they are used to "predict", like political futures markets are — are simply a form of advertising (or, viewed another way, campaign donations). Sure, they cost real money, so does buying TV ads. But, (1) they aren't regulated, the way political advertising and donations are, and (2) they are also negative cost if they succeed, unlike regular ads or campaign donations.
People expend real money on campaign donations and political advertising all the time without any concern for "honesty". To think that political futures markets would somehow, by using "real money", force people to be honest is absurd. Any system where action can influence the perception of political reality will be gamed by those interested in influencing that perception—especially since the perception influences the reality here—and if you make it so that the limiting factor on the degree of influence is the ability to spend money then, like most aspects of the political system, the results will be skewed by the interests of those most able to burn money to acheive their political ends.
Parent
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Figure out who really are the smart ones in the group for various questions and then weight accordingly. Add a bit of recursion/meta and voila
BTW I heard that at least one person in the world has a neuron specializing in Halle Berry.
Maybe consciousness is what happens when your "simulation" extremely recursively tries to predict itself.
Predicting external objects and creatures w
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Someone at Google has been reading John Brunner... (Score:3, Insightful)
--Gene
If that's all they can predict... (Score:2)
Wikipedia article on prediction markets (Score:5, Informative)
High Definition (Score:2, Funny)
prediction markets or gambling ? (Score:2)
and seriously......"Goobles"? They have to chose a name that sounds like one coming from a semi-dictator regime (Putin)? Whatever happened to "Googo" (like euro) or "Ginar" (like dinar) or "Ganc" (like franc) or even "Grona" (like krona) ?
Gubble? (Score:2)
Phillip K Dick.. (Score:2)
Prediction markets in Earthweb (Score:3, Informative)
In Earthweb [amazon.com] prediction markets have a major role in the plot. Prediction markets are used to harness the wisdom of the crowds over the whole planet; this is what the title references. The book also speculates on some of the problems that might happen with prediction markets, such as people who just try to figure out an expert's prediction and just bet the same as that expert. (This expert-following skews the results; the followers are not adding any more insight to the market, and they might be lending their support to someone who might be wrong.)
The book is really a bunch of cool future Information Age ideas, with just enough plot to stitch them together. The action sequences are as energetic and implausible as a Tomb Raider game. It's not Shakespeare but I enjoyed it.
P.S. The book also tells, as part of its backstory, about a bunch of inexpensive computing devices with networking built in being air-dropped over the poorest parts of the world, to give poor children some sort of an education. He wrote this years before OLPC.
steveha
Predictions helped find a nuke, and a missing sub (Score:2, Interesting)
Great idea, just don't tell Congress (Score:3, Insightful)
Pentagon tried just this in 2003 — use the method [gmu.edu] to predict terror attacks. The Congressional outcry about "trading in blood" was such, that the program was scrapped shortly after being announced...
Quoting from MSNBC report [msn.com]:
Congress was only calling the spade a spade. (Score:2)
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Alright, teacher of the people. Could you define, what "trading in blood" means?
Or did you simply fall for somebody else's demagoguery?
This market may or may not be efficient in predicting terrorist attacks, but there is nothing morally wrong with it.
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Prediction markets are pretty terrible at predicting. Instead what they show is the wisdom of the crowds.
If we were to create a prediction market for blu-ray over HD-DVD, it would have suddenly shifted to blu-ray winning by a greater margin right after Warner bros announced it was going blu-ray exclusive. Now how was that a prediction? It's not.
Then next week, when HD-DVD makes some announcement, the market will adjust back some other direction.
This is
Prediction Markets are absolutely useless (Score:2)
Look at the political markets which didn't price Mike Huckabee in until a month ago, never minding the best bet is always the governor of a southern state (and there is only one this election cycle!!!).
Look at football gambling. Every week some group of people actually bets the road favorites heavily even though it is a fact that a home team underdog stands a consistently better chance. In football, homefield advantage is overwhelming, so much so that if you consistently bet on the home team underdogs th
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I suspect that even in an efficient market the home underdog phenomenon would persist. Also, I'll offer the stock market is far from an efficient market for information... although I know there's a 9/11 conspiracy theory that says otherwise.
The basic problem is that the markets don't process information at all. They process attitudes and assumptions, which are often very different from information.
Look at stuff like the political markets for the Democrats. All the information about Obama and Clinton wa
How Prediction Truly Works: (Score:3, Interesting)
There's a fascinating book that addresses all these points called "More Than You Know" by Michael J. Mauboussin. I have recently been at one of his lectures at an investment conference (and got an autographed copy of his book). He gave a poignant example about prediction quality of a group vs the individual:
He put jelly beans in a jar and made his students guess the amount of beans the jar contained. He offered a small monetery reward as incenctive, to better ensure educated guesses. With the exception of 2 students, the class average came close to guessing the amount of beans in the jar than any one individual. His book offers interesting examinations of psychology and group behavior applied to financial markets.
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Google's prediction market at O'Reilly Money:Tech (Score:2)
I've been spending a lot of time thinking about parallels between Web 2.0 and Wall Street. Because of course, the stock market is one of the largest prediction markets of all.
But it doesn't end there. There are lots of fascinating things to learn by studying the parallels, including why Web 2.0 will
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Of course if they did that sort of thing openly people might stop using them for search, email, etc.
2) If I were the NSA I would prefer to have something like Google around just so that it's easier to keep an eye on stuff.
The rest of the smart people can spend their whole day getting free massages and food it doesn't really matte
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Layne
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Ha ha. And when would that have been?
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sounds familiar (Score:2)