Mike Linksvayer

I saw author Wil McCarthy give a talk at Etech nearly two years ago and read the book shortly after. Now (via Boing Boing) Hacking Matter is available as a free download (under the most restrictive Creative Commons license), so I guess it’s time to post a mini-review.

Programmable matter is any bulk substance that can have its physical properties altered on demand. McCarthy’s focus is on quantum dots woven into bulk matter and controlled by electricity.

The quantum dots can form arbitrarily sized artificial atoms on demand, radically changing the bulk matter’s properties. Examples (from p. 119 of the PDF):

Not all of these could be changed arbitrarily and simultaneously, as many are correlated, but the point is “doped” matter becomes practically magic. Apart from obvious many billion dollar applications in fashion, personal and household goods and industrial processes, cheap bulk programmable matter would enable the conservation bomb to go nuclear (figuratively speaking), producing super efficient heating, cooling, and solar engergy collection. Beyond that, the possibilities quickly go into the realm heretofore of science fiction and magic.

There is a problem of course–making quantum dots in bulk cheaply. Apparently progress is being made, but there’s a long way to go to anything that could be called cheap. As far as I can tell a hot application now is “nanosensing” which isn’t really bulk.

Molecular nanotechnology could presumably produce programmable matter with abandon, but MNT may be some ways off. From about as far away from any related field as possible, quantum dots lack the hype and controversy surrounding “nanotechnology” and MNT, though research and small scale applications are well underway. As solid state, programmable matter also shouldn’t scare some people has MNT has–no self replication.

Hacking Matter is a popular science book and tries to balance between describing the personalities doing the research, technical information, and wild speculation. I could’ve done without the anecdotes. I’m sorry to admit that the technical parts were at about the right level for me, having a very weak science background, which also leaves me largely unable to pass judgement on the speculative parts. There definitely needs to be a more rigorous but still somewhat accessible treatment.

I was convinced that programmable matter will be an important technology in the not too distant future, though not inspired a la Engines of Creation, though that comparison is probably unfair.

I recommend skimming Hacking Matter if you’re interested, and skimming the brief programmable matter FAQ even if you aren’t particularly interested, just for the purpose of being informed.

At Etech I asked McCarthy if he had any easily judged predictions about the development of programmable matter technology (for use as prediction market claims of course). He didn’t have anything concrete on the spot–something about “bulk material should be available” if I recall. The Cheaper Dots story cited above mentions “$2,000 a gram”. Are cost per gram or grams produced good general metrics?

Giving and asking for recommendations for worthy charitable donations seems to be popular this time of year, so I’ll do both, following my earlier unsolicited financial advice.

Excepting the very laws of nature (see arch anarchy), aging and its resulting suffering and death is the greatest oppressor of humanity. As far as I know Aubrey de Grey’s Methuselah Mouse Prize/Foundation is the only organization making a direct assault on aging, so I advise giving generously. Fight Aging! is the place to watch for new anti-aging philanthropy.

The most important human-on-human oppression to end, in the U.S. at least, is the drug war (which directly causes oppression in other jurisdictions as well). I’ve only mentioned this in passing here. There’s too much to say. The Drug Reform Coordination Network is saying some of it. The Marijuana Policy Project seems to be spearheading state level liberalization initiatives. See MPP’s 2006 plan. I met MPP founder Rob Kampia a year or so ago and was left with a good impression of the organization.

Wikipedia is the current exemplar of the anti-authoritarian age and I love their transparency.

Finally, you could help pay my salary at Creative Commons, more in these letters.

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I’d really prefer to give entirely outside the U.S. and other wealthy jurisdictions. However, I’m not interested in any organization that gives direct aid (reactionary, low long term impact), supports education (feel good, low long term impact), exhibits economic neanderthalism, has religious or social conservative ties, or is a shill for U.S. foreign policy in the areas of drugs, terror, or intellectual property. I am looking for organizations that support autonomous liberalization or any of the goals exemplified by the organizations I already support above. Suggestions?

I suppose supporting prizes is one means of donating without respect to jurisdiction. In cases were low cost is important, researchers in cheap areas will tend to win.

I’d also prefer to give via some innovative mechanism. We’ll see what the new year brings.

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Wikipedia chief considers taking ads (via Boing Boing) says that at current traffic levels, Wikipedia could generate hundreds of millions of dollars a year by running ads. There are strong objections to running ads from the community, but that is a staggering number for a tiny nonprofit, an annual amount that would be surpassed only by the wealthiest foundations. It could fund a staggering Wikimedia Foundation bureaucracy, or it could fund additional free knowledge projects. Wikipedia founder Jimmy Wales has asked what will be free. Would an annual hundred million dollar budget increase the odds of those predictions? One way to find out before actually trying.

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Of course I expect all of my donations to have imperceptible impact, almost as imperceptible as voting. But it’s all about expression. I’ve increased my expressive value by including a donor comment — “in loving memory of Άναξιμένης” — with my Wikipedia donation. I got an expressive boost when my comment was chosen for highlighting.

(Anaximenes of Miletus was a pupil or contemporary of Thales and has a cooler sounding name. As a kid I’d dedicate donations to Alexander the Great, but I now know better.)

In a compelling post Chris Anderson claims that people are unconfortable with distributed systems “[b]ecause these systems operate on the alien logic of probabilistic statistics, which sacrifices perfection at the microscale for optimization at the macroscale.”

I suspect one could make an even stronger claim closer to people’s actual thoughts, which aren’t about probability: people crave authority, and any system that doesn’t claim authority is suspect.

The most extreme example does not involve the web, blogs, wikipedia, markets, or democracy, all of which Anderson mentions. Science is the extreme example, and its dual, religion.

Science disclaims authority and certain knowledge. Even scientific “laws” are subject to continued investigation, criticism, and revision. Religions claim certain knowledge with no evidence, only assertions of authority, and count billions as believers.

Distributed systems sacrifice claims of perfection for optimization at the macroscale.

What wikipedia really needs is the pope to declare certain articles infallible.

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On the subject of response to the ongoing rounds of wikipedia criticism, this otherwise excellent post from Rob Kaye is pretty typical:

The Wikipedians will carry on their work and in another 5 years time it will be better than encyclopedia britannica — its only a matter of time.

For me this time is measured in negative years. I loved paper encyclopedias as a kid (but was always skeptical of their content–very incomplete at best). I haven’t looked at one in years. I use wikipedia every day.

Not having access to a paper encyclopedia means I have more shelf space to work with. Not having access to wikipedia would be a severe annoyance. In another 5 years time it would be a severe disability.

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Addendum 20051225: I forgot to mention another example of ready acceptance of bogus authority versus rejection of uncertain discovery: the WMD excuse for invading Iraq versus the horror at an attempt to aggregate predictions about the effect of policy.

I sadly could not attend last Friday’s mini-conference in San Francisco on prediction markets, but Peter McCluskey has an informative write up.

Apparently Tradesports explained why it makes it a pain to link to its contracts. They want to sell access to the data. I don’t see easy linking and data sales as mutually exclusive, but Tradesports’ current practice doesn’t help it win bigger opportunities (becoming the dominant PM exchange).

A Microsoft representative promoted the use of open source licenses. (Indirectly.)

An implication that real money traders did consider the Bush re-election good for terrorist stock:

[Eric Zitzewitz] showed an amusing graph indicating that Tradesports prices implied Osama was twice as likely to be captured in October 2004 as in November 2004 (implying some connection with the U.S. elections).

With conditional futures voters could’ve been informed of that collective opinion before the election.

Go read McCluskey’s comments, replete with links.

Chris Hibbert is also blogging his summit presentation on Zocalo.

Chris F. Masse .COM takes me to task in an extended comment on my post about the WSX advisory board. In an extended conversation I like to qualify all statements, then qualify my qualifications, driving my partner crazy. I leave most of that out when writing. Equivocation follows. Masse commented:

As for Cass Sunstein, he is a law professor, not an economist —just a detail missing in your upbeat piece. And in his blog entries that you so eagerly point to, he didn’t seem to show any real mastering of the topic. (Cass Sunstein being a friend of your friend Lawrence Lessig, I guess that’s what explains you lack of critical reasoning here —you spare it for your blog entries on Bush #43 and the U.S. military.)

I can only cite economists? You’re correct that Sunstein’s posts this summer at best demonstate that he’s coming from a completely different world. If I recall they prompted lots of virtual head scratching in comments. I expect to have many critical comments about his forthcoming book. For the record I loathe protectionist whiner John Edwards, another past Lessig guest blogger.

What makes you think that the play-money WSX is going to surpass the long-established TradeSports/InTrade U.S. political prediction markets!????

(You said “could”, OK. Your mother didn’t raise any risk-taking fool.)

Actually my equivocation went much further than “could” — “If the Washington Stock Exchange advisory board is any indication, WSX could displace IEM and Tradesports as the source for quotable market odds for the 2006 US elections. The AB may mean nothing…”

I didn’t spell it out, but I think at best WSX could become the preferred market for the media to quote. As a play-money market it is only a very indirect theat to TradeSports. Still, my post was too uncritical. Thanks for calling me on it.

By the way, Masse now has an RSS feed which I highly recommend subscribing to if you’re interested in the latest news and opinion on prediction markets, along with the occasional rant in the form of a deeply bulleted list. Unfortunately only the last have permalinks.

If the Washington Stock Exchange advisory board is any indication, WSX could displace IEM and Tradesports as the source for quotable market odds for the 2006 US elections. The AB may mean nothing, but assembling the names it has demonstrates some foresight on the part of WSX, as does reducing its risk through use of proven open source prediction market software.

Cass Sunstein is the latest edition to the WSX AB. The WSX blog post announcing the addition notes that Sunstein is working on a book entitled Mobs and Markets: How Many Minds Produce Knowledge.

Though Sunstein’s interest in prediction markets, wikis, the blogosphere and such was obvious in his July guest postings on the Lessig blog, only one page currently indexed by Google is aware of the title of his book: the Cass Sunstein page at Wikipedia. How apropos. It currently (since October 6) says this:

His forthcoming book, Mobs and Markets (Oxford University Press 2006, now in final stages) explores methods for aggregating information; it contains discussions of prediction markets, open source software, and wikis (with substantial attention to Wikipedia).

Kathleen Pender writes about Hedgestreet in today’s San Francisco Chronicle:

It’s not practical yet, but if and when it reaches critical mass, consumers could use it to hedge their financial risks the same way companies use the futures markets to protect themselves against adverse price swings.
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Because of their short maturities, Hedgelets are not yet useful for making long-term bets on housing. As volume grows, HedgeStreet plans to add more cities and longer-dated contracts.

Why not offer useful hedgelets first and as volume grows experiment with less practical contracts (if at all)? Perhaps HedgeStreet considers itself in beta and wants to avoid taking off until the appointed time. Seems crazy to me.

Another crazy thing: making your product unlinkable.

Google announced they’re using prediction markets internally:

The markets were designed to forecast product launch dates, new office openings, and many other things of strategic importance to Google. So far, more than a thousand Googlers have bid on 146 events in 43 different subject areas (no payment is required to play).

Very cool. However, I wonder about their accuracy of prices graph. It isn’t clear when the prices graphed were taken relative to the events predicted. It appears that very low probability events are overpriced and very high probability events are underpriced, as on the Foresight Exchange.

Prediction markets should become a standard groupware feature.

On the subject of punditry, i.e., predictions made without consequence for the predictor, Art Hutchinson has claimed over the past several months that use of internal prediction markets is on the upswing. I said so in January. :-)

In May there were none.

The software that has run Foresight Exchange for many years (and soon a political market) was open sourced today (under an odd license).

Zocalo had a new release last week.

FreeMarket seems to have been available for a little over a month.

For the heck of it, compare the one item represented by claims on both FX and FreeMarket’s demo: Gas$3 and $3 for a gallon of gas respectively. The FX claim is trading lower (about 30 versus about 35) even though for it to pay off gas must reach $3 by 2005-12-26 while the FreeMarket demo claim pays if gas reaches $3 by 2006-08-18.

FX is still the only site with remotely interesting claims. Hopefully all these packages will directly support conditional claims one day soon (Zocalo has plans) and the sites that use them will get more interesting as a result.

Update 20050830: The first sentence above is wrong. Chris Masse’s list reminded me of Peter McCluskey’s U.S. Idea Futures Market from 1999 (I didn’t realize until now that the source has been available). Check out USIFEX’s excellent FAQ on What are conditional claims and how do they work?

Jimmy Wales, guest blogging at Lessig’s, has started what promises to be an interesting series of posts on ten things that will be free (as in free software):

[T]his is not a dream list of things which I hope through some magic to become free, but a list of things which I believe are solvable in reality, things that will be free. Anyone whose business model for the next 100 years depends on these things remaining proprietary better watch out: free culture is coming to get you.
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For each of the ten, I will try to give some basic (and hopefully not too ambiguous) definitions for what it will mean for each of them to be “solved”, and we can all check back for the next 25 or 50 years to see how we are doing.

In a subsequent post Wales is even more explicit:

[T]he point of naming the list “will be free” rather than “should be free” or “must be free” is that I am making concrete predictions rather than listing a pie in the sky list of things I wish to see.

I’d love to see similar (but shorter term and more thoroughly specified) predictions as claims on a prediction market. With the right set of claims we can more easily talk about, and plan for, which things are more likely to be free, and when.

Thus far Wales has predicted encyclopedias and curricula will be free. I can’t think of any segments that I am fairly certain will be free, are associated with large businesses, and have not already been alluded to in the comments on his first post.

However, regarding widely deployed software (e.g., operating systems, productivity applications) I have a theory explaining why it will be free: Microsoft Windows and Office have a half life–eventually a release of each will be a failure, at which point the only viable alternaives will be free, and any non-free alternaitves will face slow death–think commercial Unixes in the face of Linux. I’m not going to stand by this theory–it probably assumes too little change, of any sort.

Dear Temporary Dictator 43,

Start thinking about your “legacy.” Nominate a respected intellect to the supreme court. Richard Posner would do famously. He has some stupid ideas compatible with your own but probably has more sense than anyone else possibly on your radar. More importantly for your legacy, he is held in greater respect than anyone else you could hope to nominate.

If you just can’t bear Posner’s opposition to a “partial birth” abortion ban, choose Alex Kozinski.

However, you should ignore demands from your social conservative supporters for payback in a nominee. Think about your legacy, not the next election–you’re not running.

Unfortunately bettors at the Trade Exchange Network aren’t giving Kozinski much chance (current bid/ask is 0.2/2.9) and Posner isn’t listed (I just suggested that he be). Beat expectations, boost your legacy!

For this post’s title, apologies to Dick Posner and the Supreme Dicks, a great 1990s band that rocked like the Sun City Girls on quaaludes.

Biogerontologist Aubrey de Grey gave lectures at Stanford Thursday evening and Friday morning. de Grey laid out his argument for life extension research at the first talk. My brief summary:

• There are seven changes at the cellular level that accumulate and eventually cause pathology.
• No new such changes have been discovered in over twenty years despite massively increased capability to study organisms at the cellular level in that time; seven is probably it.
• All seven changes should be repairable at the cellular level.
• Repair damange below levels that cuase pathology, goodbye aging.
• If an individual lives through the first breakthrough that extends lifespan by decades they will probably survive through the next, and the next… Hello, indefinite lifespan.
• Aging and death are barbaric and must be stopped.

de Grey calls the second to last point “escape velocity” and presented at least two arguments for it:

• Once a breakthrough is made, science progresses in a relatively straightforward and rapid fashion for awhile.
• Other primates’ aging is very similar to humans’, only at least twice as fast. There is time to discover and cure any new disease of extended life before any humans get it.

The second talk, apparently more intended for biologists, was a repeat of the first to a disappointing extent. I was prepared to understand very little, but de Grey only spoke for awhile on one of his proposed solutions to one of the seven types of damage–extracellular junk. The solution takes a cue from bioremediation: find microbes that break down the extracellular junk. Where? Human remains of course. From Appropriating microbial catabolism: a proposal to treat and prevent neurodegeneration:

Soil microbes display astonishing catabolic diversity, something exploited for decades in the bioremediation industry. Environments enriched in human remains impose selective pressure on the microbial population to evolve the ability to degrade any recalcitrant, energy-rich human material. Thus, microbes may exist that can degrade these lysosomal toxins. If so, it should be possible to isolate the genes responsible and modify them for therapeutic activity in the mammalian lysosome.

Neat idea. Later de Grey said that this idea is the easiest to explain to non-specialists and that the others that he has personally worked on would have required far longer to introduce than the hour lecture format allowed.

de Grey is attempting to jump start anti-aging interventions with the Methuselah Mouse Prize[s] for extending the lifespan of mice, inspired by the X Prize. His “engineering” approach sounds good to me and I wholly endorse the goal of defeating aging. I will donate more once more information is provided about the participating scientists and their mice–not much is available at this point.

There are four (unfortunately not real money) claims related to the M Prize. Three directly concern the prize:

Methuselah Mouse Postponement. Predicting a 2929 day old mouse by 2010/01/01. The current record is 1819 days.

Methuselah Mouse Post up 1 yr. Says there’s a 2/3 chance of a 2284 day old mouse by 2012/11/01. That doesn’t seem to jibe with MMPost above (time to short MMPost I think). [Correction 20060102: I misread the claim. As of 20050612 it predicted a 2284 day old mouse on 2010/02/01, which still didn't jibe with MMPost, though the discrepancy was not as bad as I thought]

Methuselah Mouse Reversal<2015. The wording of this claim could be better (the current prize holder is for 1551 days, the claim would pay 1 if 3102 day old mice were obtained by 2015/01/01). Last trade at .67, predicting a 2590 day old mouse with anti-aging interventions only begun late in life within 10 years.

Immortality in mammal by 2015. Not really immortality, but three times a species’s maximum life span as of 1996. Possibly the world’s oldest mouse in 1996 was just shy of four years. If so, this claim would predict a less than one in five chance of a 4380 day old mouse by 2015/12/31. (Another mammilian species could meet this claim.)

It would be very interesting to see versions of the above claims conditioned on the M Prize reaching some fundraising goal.

Friday afternoon I saw a demo by Chris Hibbert of Zocalo, to be an open source platform for running markets. The demo involved playing an apparently classic experimental economics game originally run by Charles Plott.

The game was extremely simple, but more educational for me regarding the methods of experimental economics than having read the occasional popular account over the years. I imagine that such games could be useful in basic education. The dynamics of power seem more intuitive than the dynamics of exchange, yet the former (politics, war and history seen through their lens) gets far more time (possibly this has something to do with the phenomenon of overestimating market failure and underestimating political failure). Perhaps in the near future youth participation in virtual world economies will help fill this educational gap.

Also of note: As of the demo Zocalo is built on mod_pubsub (roughly javascript client in browser keeps http connection open to server, allowing real time updates, no polling and no flash, java or similar required) and has a cool logo. I look forward to the results of further development.

Read the white paper: Zocalo: An Open-Source Platform for Deploying Prediction Markets.

Michael Stastny quoting a closed Financial Times column:

President John F. Kennedy helped to revive the City of London in 1963 by imposing a tax on US investment in foreign securities. That made the international bond market move to London, allowing the City to regain its 19th century status as Wall Street’s rival in capital markets.

I did not know this bit of history. It seems like a perfect illustration of some obvious but often ignored truth, perhaps simply that policies have consequences. Consideration of more than policy advocates’ lies may be in order. Betting market prices may be one valuable source of more information.

A small irony then, that U.S. regulation is ensuring that the leading betting markets are located outside the U.S., largely in London. Eventually this may be a big deal:

It does not sound like a very worrying loss for Wall Street given its strong position in equities, bonds and derivatives. But Mr Bloomberg should watch out: in an arena of financial innovation that is rapidly converging with other forms of trading and investment, New York is drifting behind London.

As an anti-nationalist, I don’t care much where the leading markets locate; I just hate to see stupid policy implemented anywhere, including the U.S. If I were betting on the consequences of this policy I’d short New York.

Financial markets too gauche? Think through the likely consequences of heavy handed cloning regulation.

Kragen Sitaker thinks out loud about dominant assurance contracts for funding public goods, especially free software. My first post on dominant assurance contracts is here. A few thoughts regarding Kragen’s analysis follow.

On public goods:

Generally public goods tend to be underprovided

Almost by definition, but my intuition is that there are important and almost universally unacknowledged exceptions where the good is nonrival, production generates large private benefits, consumption opportunities are limited, or perhaps some combination of these, e.g., recorded music. However, I have no rigorous backing for this intuition. Todo: read existing literature on socially optimal copyright.

[Richard Stallman] would be a happier man today had he spent those years [writing free software] not working with computers at all

I don’t know whether Stallman is happy, but this sounds suspect. He has gained tremendous personal benefits through his programming that he probably couldn’t have obtained otherwise (though perhaps this does not matter, as he shouldn’t have expected to become famous and leader of a very significant movement, unless he was a megalomaniac). It would be more interesting and clearer to make a case that the modal free software contributor acts selflessly, but that would be a long argument and beside the point, which I suppose is simply that unselfish action can produce some public goods.

On dominant assurance contracts:

I suspect that the analysis extends to a more general case, in which each contributor chooses the amount of their own contribution $S, the escrow agent performs the project if the total contributions are over some basic amount, and the extra refund is a specified percentage of the contribution rather than a specified dollar amount; but Tabarrok does not mention this in his paper.

Looks like a very useful extension.

However, copyright places the risk on the artist, while dominant assurance contracts place the risk on the artist’s fans.

I think here the risk is of a worse than expected work. It ought to be possible for an artist to assume more risk by making fulfillment of the contract (and thus not having to refund contributions plus a penalty) contingent on some agreed and hopefully minimally gameable quality measure.

[Update 20050605:On second thought I'm confusing (or extending) the dominant assurance contract idea, which only stipulates that a failure penalty be paid when not enough resources are raised, not when a successfully funded project is not successfully completed.]

Someone also asked whether it was possible to model a dominant assurance contract as a normal assurance contract with a separate prediction market, like the Iowa Electronic Markets, in which people traded idea futures on the likelihood of the completion of the funding. I don’t know how to model it in those terms, although it might be possible.

I don’t know how to model an assurance contract plus prediction market hedging either, but I suspect it may not work as well as a dominant assurance contract.

First, with a dominant assurance contract only contributors receive a payoff in the case of failure. If contribution and failure payoff are unbundled, how are incentives to contribute any different than a plain assurance contract? One can hedge against failure without contributing to sucess.

Second, risk and management of risk is transferred from the entrepreneur to the contributor. Managing risk by hedging securities is hard and costly. The entrepreneur offering the contract may be far more capable of managing risk than contributors.

Prediction market prices may prove helpful to entrepreneurs and potential contributors in deciding what contracts to offer and accept, but this is orthogonal to the structure of dominant assurance contracts, which attack contribution problems rather than revelation problems.

Finally, Tabarrok suggests that the market for escrow agents should be highly competitive because there are low barriers to entry — all you have to do is write a three-line contract and hold some money, assuming that the possible contributors first hold some kind of competition to select which escrow agent they want to use. I think that’s a big assumption, and that escrow agents are likely to wield substantial market power by virtue of network effects, and consequently extract substantial profits from this business.

A well-known escrow agent will be able to attract many more contributors, and so will be able to require much less money from each, which is likely to be a large incentive to use the well-known
agent.

Tabarrok does not mention escrow agents, who may well be involved, but I see no reason to assume the market for such services should be any less competitive than any other market for financial intermediaries. He says that he expects the market for contract providers to be competitive. Presumably these will be entrepreneurs with an expertise in producing a particular public good or aggregators. We have examples of these, from contractors to the United Way or eBay. How would dominant assurance contracts alter the competitive landscape, for better or worse?

[Update 20050605:The distinction I draw between escrow agents and contract providers may not be relevant. It appears that Fundable acts as an aggregator/marketplace and an escrow agent. Also, citing eBay may not inspire confidence. I've read, but cannot find a cite for, that it has 85% market share in the US person-to-person online auction market. Whether this is something to worry about will be in the eye of the beholder, e.g., what "market" is relevant -- eBay faces indirect competition from garage sales, new goods at retail, and everything in between. Kragen will "just" have to work on zFundable.]

Kragen also has good thoughts on how dominant assurance contracts could prove useful in several fields, potential problems, and responses to several irrelevant objections. Read the whole thing and see Tabarrok’s paper and recent post without which none of the current discussants would be aware of the idea.

Chris Masse is an old fashioned (email) networker. Most recently he sent me a couple emails regarding my aside in this post:

Another complaint about HedgeStreet and to a lesser extent TradeSports: lack of easily linkable URLs for contracts. C’mon, it’s the web, get with the program!

Back to that concern in a second. First, I noticed that Chris included me in his list of blogs about prediction markets. I got a kick out of my entry:

Mike Linksvayer’s blog - My opinions only. I do not represent any organization in this publication.

• Category: Prediction Markets
• Mike Linksvayer is a developer, consultant and IT manager who is into open source software and public domain—among multiple tech topics.
• He was recently profiled by one of his former Creative Commons’ colleague.
• I think of him as a libertarian Democrat (or a Democratic libertarian)—I’m not sure, though.
• He’s been good to me, but I fear him. The day I’ll miss a piece, he’ll assassinate me—cold blood. (Take a look at how he teared down economist Tyler Cowen.)
• A Robin Hanson-compatible guy.
• OUTING: Mike Linksvayer is a TradeSports affiliate.

Not bad. I’m registered to vote as an independent though I wouldn’t be the least bit upset if libertarian Democrats had some success.

Back to my complaint. Chris has a page with links to all(?) TradeSports markets. I was aware of these market URLs, and of URLs for individual contracts (beware: this content will attempt to resize your browser winodw). That’s why I said “to a lesser extent for TradeSports.” However, these URLs are obviously designed without consideration of access other than via the larger TradeSports website. They never appear in your browser’s URL bar, making them a pain to discover and they’re either incomplete or badly behaved.

If the Trade Exchange Network wants to be the authoritative prediction markets maker (interesting that they’re seeking to be a CFTC regulated exchange) one tiny step would be to make it easy for people to link to them. Better yet each market and contract would have a feed. Even better yet, an API for accessing market data and generating custom charts. In other words, take several cues from Amazon, eBay, and many others.

Apologies to Hassan i Sabbah’s legend.

There’s lots to say about the current real estate price bubble^*, but I hadn’t considered the boon to publishers. Not online anyway. I have noticed that advertising in Silicon Valley free papers is dominated by real estate for sale. The “Got Ads?” blog says that “mortgage re-financing ads comprise at least 20% of ad volume in total dollars” and guesses that at least 35% of Google’s and Yahoo’s recent quarterly profits were directly from mortgage ads. I assume that “ad volume” above refers to pay per click ad volume. I’d like to know the source of the 20% share and logic of the 35% estimate above.

Is potential loss of mortgage ad related profits priced into Google and Yahoo shares? I don’t want to bet on that.

Unfortunately promised direct real estate price hedges appear to have not launched (Robert Shiller’s Macro Markets) or have not reached the point of usefulness (HedgeStreet’s real estate price Hedgelets are still very thinly traded and only go out six months, a slight improvement over one quarter as of the beginning of this year. (Another complaint about HedgeStreet and to a lesser extent TradeSports: lack of easily linkable URLs for contracts. C’mon, it’s the web, get with the program!)

^* I believe that we’re in a real estate bubble and that prices will decline over the next several years. However, I’ve considered housing overvalued since 2001 and stocks since 1996. Are my animal spirits a leading indicator, or just a spurious indicator?

James Boyle’s Deconstructing Stupidity column in the Financial Times has gotten lots of well-deserved linkage. Unfortunately that linkage is almost completely devoid of analysis, perhaps excepting posts from Karl-Friedrich Lenz and Donna Wentworth.

Too bad, as Boyle makes a couple of interesting claims. The first is that for intellectual property “our policy-process is almost evidence-free.” Or worse, decisions run contrary to available evidence, as Boyle explored in more depth in a column on database rights last November. However, Boyle implies that there is something special about intellectual property policy (emphasis added):

Since only about 4 per cent of copyrighted works more than 20 years old are commercially available, this locks up 96 per cent of 20th century culture to benefit 4 per cent. The harm to the public is huge, the benefit to authors, tiny. In any other field, the officials responsible would be fired. Not here.

I wish IP policymakers were particularly stupid and immune to the consequences of their decisions as compared to policymakers in other fields. Unfortunately the same bad decisions get made again and again, regardless of contrary evidence, in field after field, at least in those where decisions are political. Three examples off the top of my head:

• Financial costs of war routinely underestimated by a factor of ten.
• Drug prohibition.
• Public works estimates are highly, systematically, and significantly misleading.

I could make this list very long and I’m sure you can think of many other cases.

What to do about it? The Journal of the American Planning Association paper linked directly above wants malpractice for planners:

The policy implications of our findings are clear. First, the findings show that a major planning and policy problem—namely misinformation—exists for this highly expensive field of public policy. Second, the size and perseverance over time of the problem of misinformation indicate that it will not go away by merely pointing out its existence and appealing to the good will of project promoters and planners to make more accurate forecasts. The problem of misinformation is an issue of power and profit and must be dealt with as such, using the mechanisms of transparency and accountability we commonly use in liberal democracies to mitigate rent-seeking behavior and the misuse of power. To the extent that planners partake in rent-seeking behavior and misuse of power, this may be seen as a violation of their code of ethics—that is, malpractice. Such malpractice should be taken seriously by the responsible institutions.

Failing to do so amounts to not taking the profession of planning seriously.

Many of the authors’ suggestions may improve the situation and some could be applied to other areas of political decisionmaking. I’ll also take the opportunity to flog yet again policy markets. See the last paragraph of this post for more links and explanation.

Another suggestion is to simply reduce the scope of political decisionmaking. However, this is rarely a popular strategy. “Do something” is always the order of the day. Regardless of how ill considered something may be it is always more appealing than doing nothing. In the case of IP (how about Innovation Policy, there’s a non-pejorative repurposing of the acronym we can all agree on–turns out it is already in pretty wide use, though only 123,000 hits on Google versus 70,200,000 for intellectual property) that means extending copyright terms, expanding the scope of patents and of course more draconian enforcement. Who put the government in my bedroomgizmo?

Another interesting claim from Boyle:

To some the answer is obvious: corporate capture of the decision making process. This is a nicely cynical conclusion. But wait. There are economic interests on both sides. The film and music industries are tiny compared the consumer electronics industry. Yet copyright law dances to the tune played by the former, not the latter.

I suspect capture is not a paradoxical explanation of IP. Rights holders have a very concentrated interest in innovation policy decisions, the consumer electronics industry, much less so. A thought experiment demonstrates this: If tomorrow all works older than twenty years fell into the public domain, some rights holders of the freed works (a subset of the 4% available commercially!) would experience sharply reduced income as licensing revenues disappeared and very cheap copies came onto the market. Would you run out and buy more consumer electronics as a result? Eventually you might increase consumption of consumer electronics as a result of the availability of more and cheaper content, but I doubt it is something consumer electronics companies would count on.

Although I suspect capture is an important part of the explanation for the current dreadful state of innovation policy, Boyle does an excellent job of explaining some additional factors, including maximalism, roughly equivalent to the “do something” political imperative, authorial romance, and changes in the composition of those directly affected by IP law.

I believe that like maximalism, various romances (delusions) are at the heart of public acceptance of demonstrably failed policies. Boyle mentions in passing that many delusions are honestly held rather than being the result of corruption. I fear that this only makes positive change via politics more difficult.

At Etech yesterday morning Gary Flake of Yahoo! Labs said his organization has four research areas. I only remember three: collective intelligence, machine learning and (fairly obviously) text mining. After pointing people to Yahoo! Next, Flake launched the Tech Buzz Game. It’s a prediction market where participants bet funny money on future search traffic for keywords associated with a technology relative to keywords associated with competing technologies (e.g., the programming language market includes C, C#, C++, Java, and several others).

Either I or many game participants horribly understand how buzz scores are calculated. The game FAQ says:

The buzz score of a stock is the number of searches on any of the stock’s buzz words over the past seven days, as a percentage of all the stocks in the same market.

Yesterday Ruby was worth fifty percent more than any other language. I suspected that participants think the buzz score is a measure of relative change rather than of quantity. However, now I suspect people are voting for their favorite technologies rather than betting on results. Those players will lose on (every) Friday when prices are adjusted to reflect actual buzz score.

I wonder how weekly revaluation will impact the ability to gauge long term predictions? If participants expect a technology to become more popular over the next year (with an attendant increase in search traffic), how will the corresponding security behave week to week? Would traders consistently bidding the price of a security up and losing money at each weekly revaluation be the predictor of a long term increase in search traffic?

Though it feels toy-like, I’m gratified that this prediction market is considered a collective intelligence application. I often hear people saying that humanity needs to increase intelligence to have any hope of surviving whatever dangers are supposedly near, usually accompanied by complete ignorance of markets’ role as a distributed discovery mechanism and the potential for markets designed explicitly for information discovery.

In other idea futures news, check out open source market infrastructure to be Zocalo and its motivating proposal, to be developed at CommerceNet Labs.

Update 20050318: I was correct about scoring and revaluation. I made a 150% funny money profit after today’s revaluation, before which I had a loss. I made no trades after becoming fully invested. Will be interesting to see what happens in the next week. Will the Buzz Game merely be a “day trading” and game-rules-ignorance-arbitrage phenomenon? I suspect so. Too bad. A market structured to make predictions about technology success would be really interesting.

Name the only license both explicitly called out by the Free Software Foundation as non-free for matters of substance and approved by the Open Source Initiative.

The Reciprocal Public License.

Here’s why the FSF says the RPL is non-free:

1. It puts limits on prices charged for an initial copy. 2. It requires notification of the original developer for publication of a modified version. 3. It requires publication of any modified version that an organization uses, even privately.

For more on why these might be problems see debian-legal tests for Debian Free Software Guidelines compliance.

Further trivia: The Artisitc License is the only OSI-approved license rejected by the FSF for matters of wording:

We cannot say that this is a free software license because it is too vague; some passages are too clever for their own good, and their meaning is not clear.

Addendum 20050311: I looked up the RPL and discovered these bits of trivia after reading that FX is considering the license.