Post Prediction Markets

Bill Richardson > /tmp/dictator

Saturday, December 29th, 2007

I endorse for temporary dictator of the U.S. jurisdiction. His positions on executive power seem acceptable, his overall domestic policies and record as governor of New Mexico are better than most politicians (i.e., not abominable), and his foreign policy is not insane. Regarding the last, Richardson outlines his principles in this video.

True, ‘s more radical foreign (and general) policy is mostly closer to my preferences than Richardson’s. However, in spirit and delivery, Richardson’s foreign policy is a viable and positive alternative to interventionism, approximately the Wright thing, in contrast to Dr. No’s.

And Richardson is in theory electable, while Paul is not. Traders are probably correct in giving Richardson essentially zero chance of winning the Democratic nomination at this point, but they are certifiably insane to give Paul even a smidgen of a chance of winning the GOP nomination (currently about 7%), let alone the dictatorship (4%).

I also think that to the extent the Paul campaign gives some libertarians (entirely false) hope of revolutionary change for the better through electoral politics, the campaign and whatever success it has is a bad thing. It makes me sad to see libertarians impoverish themselves by sending a “moneybomb” to a hopeless electoral campaign.

However, I probably would not have bothered to tack on this anti-endorsement of Paul had I not seen this excrement from his campaign.

Paul is also a religious kook (but then so is every candidate, of one sort or another). At least Barack Obama admits doubt, which I’d challenge any other candidate to do. As Richardson doesn’t have any chance of nomination, this post is effectively an endorsement.

Via Freedom Democrats and Sheldon Richman.

Posted in Apartheid, Peeves, Politics, Prediction Markets | 6 Comments »

Blog search putrefying

Saturday, December 22nd, 2007

I’ve complained before here that blog search stinks and isn’t getting better. Now I know why — in addition to blog search being a difficult and expensive service to run — there isn’t much demand. The blog search focused sites I mentioned in the “stinks” post each seem to have gained no traction since then, excepting Technorati, which itself is constantly rumored to be troubled.

A TechCrunch post on traffic at various Google properties finally gave me a clue and an inclination to look at my past posts on blog search. Click through to see a graph showing that Google Blog Search barely registers.

To end on a positive note, perhaps blog search is a good use case for , as it isn’t economic for a centralized entity to do well. This reminds me, whatever happened to various ?

…

Only tangentially related to blog search, I really like Chris F. Masse’s post on blogs vs. newspapers, in which Wikipedia sits at the top of the ecosystem:

So the real winner is Wikipedia — a news and knowledge aggregator… using anonymous volunteers. But Wikipedia is only an information aggregator… it feeds on both media and blogs to gather the facts. Wikipedia is the common denominator of knowledge —not the primary source of reporting. Just like prediction markets feed on polls and other advanced indicators.

Posted in Blogs, P2P, Peeves, Prediction Markets, Wikipedia | No Comments »

Go Antigua!!!

Saturday, December 22nd, 2007

The dispute between the U.S. and Antigua jurisdictions over the former’s is one of the most interesting happenings of the past few years. I’ve been meaning to write about it for about that long but haven’t had much more to say than what you see in the post title. Antigua correctly sees the U.S. as restraining trade and has obtained favorable rulings at the World Trade Organization.

(actually the jurisdiction of ) is seeking the right to suspend enforcement of U.S. copyrights as an alternative remedy. Unfortunately this sounds way more interesting than it is, except possibly for its precedent. The latest ruling only allows the suspension of US$21 million worth of intellectual protectionist obligations, a trivial amount that will itself be subject to radically different interpretations considering how difficult and arbitrary the valuation of nonrival goods can be (the RIAA’s ridiculous valuation of shared audio files is exactly a case in point). Even had Antigua’s request for US$3.44 billion not been cut down by about 99.4% the result would have been largely academic.

I have sub-golf level interest in horse racing, poker, or other gaming-oriented gambling activities. So why is this case so interesting? There is or David vs. Goliath aspect, but mostly I really want to see U.S. gambling prohibitions go down in flames, both because they are a tool for arbitrary censorship and control in much the same way copyright is and because they are a barrier to use of .

The world will route around this U.S. stupidity, but at great loss, not least to Americans.

Posted in Economics, Free Speech, Intellectual Protectionism, Peeves, Politics, Prediction Markets | No Comments »

Bond prices on historical and contemporary civil war outcomes

Sunday, November 18th, 2007

Did Johnny Reb have a Fighting Chance? A Probabilistic Assessment from European Financial Markets (PDF) by Kim Oosterlinck and Marc D. Weidenmier looks at Confederate gold bonds traded in Amsterdam from August 1863 through the end of the war, taking bond price (probability of repayment) as the probability of Confederate victory (meaning survival as an independent state that could service its debts).

A very interesting new window on history, one that is crying out to be applied to other situations were a government faces an existential threat, as the authors point out:

Although this study has focused on the American Civil War, the methodology employed in this paper could easily be applied to several other historical or modern day episodes to provide some insight into the evolution of victory probabilities during a period of civil war/revolution. The methodology might be particularly interesting to apply to a communist revolution given that Marxist regimes generally repudiate a country’s debt obligations and do not recognize international capital markets. For example, it might be interesting to know the evolution of victory (defeat) probabilities during the Spanish Civil War or the Cuban Revolution of the 1960s. Another possibility is to use the technique to estimate the probability that the thirteen colonies would win the American Revolution. The methodology could also be extended to estimate the probability of a victory by Germany during World War I or the Nazis during World War II. Applying the methodology to the world wars would be more complicated given that it is not clear whether the recovery value of the war bonds would be zero in the event of a defeat. We leave these items for future research.

What do bond prices say about contemporary Iraq? I don’t see any nice graph over time, but apparently current prices imply an 80% chance of default over the lifetime of one issue (through 2028), and apparently the “surge” hasn’t improved bond investor outlook.

Interesting, but survival of a government willing to repay past debts is way too coarse for most policy decisions and the probability of various policy decisions are not disaggregated. For these reasons prediction markets contingent on policy implementation and electoral outcomes are badly needed.

Via Robin Hanson.

Posted in Economics, Iraq, Prediction Markets | No Comments »

Peer producing think tank transparency

Wednesday, October 31st, 2007

Hack, Mash & Peer: Crowdsourcing Government Transparency from the looks like a reasonable exhortation for the U.S. jurisdiction government to publish data in so that government activities may be more easily scrutinized. The paper’s first paragraph:

The federal government makes an overwhelming amount of data publicly available each year. Laws ranging from the Administrative Procedure Act to the Paperwork Reduction Act require these disclosures in the name of transparency and accountability. However, the data are often only nominally publicly available. First, this is the case because it is not available online or even in electronic format. Second, the data that can be found online is often not available in an easily accessible or searchable format. If government information was made public online and in standard open formats, the online masses could be leveraged to help ensure the transparency and accountability that is the reason for making information public in the first place.

That’s great. But if peer produced (a more general and less inflammatory term than crowdsourced; I recommend it) scrutiny of government is great, why not of think tanks? Let’s rewrite that paragraph:

Think tanks produce an overwhelming number of analyses and policy recommendations each year. It is in the interest of the public and the think thanks that these recommendations be of high quality. However, the the data and methodology used to produce these positions are often not publicly available. First, this is the case because the data is not available online or even in electronic format. Second, the analysis that can be found online is often not available in an easily accessible or searchable format. Third, nearly everything published by think tanks is copyrighted. If think tank data and analysis was made public online in standard open formats and under open licenses, the online masses could be leveraged to help ensure the quality and public benefit of the policy recommendations that are the think tanks’ reason for existing in the first place.

Think tanks should lead by example, and improve their product to boot. Note the third point above: unlike , the output of think tanks (and everyone else) is restricted by copyright. So think tanks need to take an to ensure openness.

(Actually think tanks only need to lead in their domain of political economy — by following the trails blazed by the movement in scientific publishing.)

This is only the beginning of leading by example for think tanks. When has a pro-market think tank ever subjected its policy recommendations to market evaluation?

Via Reason.

Posted in Creative Commons, Economics, Intellectual Protectionism, Open Access, Open Source, Open Standards, Peeves, Politics, Prediction Markets, Public Domain, Semantic Web | 3 Comments »

Knowledge migration

Saturday, October 13th, 2007

Two points riffing off Paul Graham’s Why to Move to a Startup Hub (alternate titles: Why to Move to the Startup Hub or Why to Move to Silicon Valley). Probably more obvious, but it’s a theme of this blog:

Immigration difficulties might be another reason to stay put. Dealing with immigration problems is like raising money: for some reason it seems to consume all your attention. A startup can’t afford much of that. One Canadian startup we funded spent about 6 months working on moving to the US. Eventually they just gave up, because they couldn’t afford to take so much time away from working on their software.

(If another country wanted to establish a rival to Silicon Valley, the single best thing they could do might be to create a special visa for startup founders. US immigration policy is one of Silicon Valley’s biggest weaknesses.)

I suspect a jurisdiction would have to include far more than just startup founders in such a program to have any noticeable impact. But it’s not a bad sentiment. Even on purely nationalistic grounds, any jurisdiction (and especially large ones like China, India, Brazil, and Russia) ought to allow unlimited skilled immigration, preferably permanent, including citizenship.

Graham also points out the importance of specialized knowledge, emphasis added:

Boston investors will admit they’re more conservative. Some want to believe this comes from the city’s prudent Yankee character. But Occam’s razor suggests the truth is less flattering. Boston investors are probably more conservative than Silicon Valley investors for the same reason Chicago investors are more conservative than Boston ones. They don’t understand startups as well.

West coast investors aren’t bolder because they’re irresponsible cowboys, or because the good weather makes them optimistic. They’re bolder because they know what they’re doing. They’re the skiers who ski on the diamond slopes. Boldness is the essence of venture investing. The way you get big returns is not by trying to avoid losses, but by trying to ensure you get some of the big hits. And the big hits often look risky at first.

I’ve been meaning to do a post on the below for awhile but don’t have a whole lot to say, so I’ll use this tangent: New business practices and models have a whole lot going against them, even if superior to existing practices in theory — nobody has experience making them work. I suspect this applies to peer production in spades. Building up a critical mass of knowledge about how open source works has been slow going and still has a long way to go, and I’m fond of speculating that open content/free culture is a decade or two behind free software. Prediction markets are obviously in the same boat, and futarchy is far out to sea.

And so is every useful business, social, political, or other change (but keep in mind that some things don’t work, even in theory).

By the way, a startup considering a move to Silicon Valley should make the decision with the aid of prediction markets.

Via Tim O’Reilly.

Posted in Apartheid, Creative Commons, Economics, Open Source, Prediction Markets | 1 Comment »

The most bizarre sentence I’ve read today

Saturday, April 21st, 2007

Tyler Cowen just linked to a comment left by Robin Hanson on this blog. I agree with Cowen’s comment left on the same post here: “Robin is awesome, enough said.”

Hanson’s writing never disappoints, even when he’s claiming that medicine is useless (the statistical argument is strong).

On the other hand Cowen is one of my most eagerly read bloggers (and semi-frequent provider of fodder for my comments), but sometimes Cowen says the darndest things, like this from the post linked above:

The very reason we resort to a firm, rather than the market, is to build consensus and morale, not to forecast the truth.

Consensus I’ll buy, as shorthand for lower in-firm transaction costs. Morale? He’s got to be kidding (note that the only instance of “morale” in the Wikipedia article on is immediately followed by “-damaging”).

Cowen continues:

Prediction markets would tend to break down firms, but of course they still can flourish in Arrow-Hahn-Debreu space.

My guess is that in the short term adoption of prediction markets will favor firms that have access to specialists needed by early adopters to succeed and layers of management that can be made redundant without immediately threatening the authority of the top, i.e., large firms.

I have no idea what Arrow-Hahn-Debreu space is, other than that it has something to do with . If I had to take a wild ignorant guess at the import of “but of course…” I would say it is arguably a tautology.

Posted in Blogs, Economics, Peeves, Prediction Markets | 1 Comment »

The Probabalistic Estate

Saturday, April 21st, 2007

Chris F. Masse points out an article describing Bill Moyers’ Buying the War, to be broadcast April 25, in which many “top” journalists admit to being completely bamboozled by patriotism and the security state after 9/11. Willing fools include Dan Rather, former CBS anchor, and Walter Isaacson, former president of CNN.

My favorite article excerpt:

[E]ditors at the Panama City (Fla.) News-Herald received an order from above, “Do not use photos on Page 1A showing civilian casualties. Our sister paper has done so and received hundreds and hundreds of threatening emails.”

“Patriots” are the most likely domestic terrorists, right after the security state itself.

What if there were prediction market tickers for invasion outcomes running in the “footer” (I have no idea what the bottom of a TV screen is called, so I’ll borrow terminology) of the CBS newscast and CNN, or daily prices and inferred probabilities alongside newspaper stories?

Would the traders have been as stupid in aggregate as the journalists?

To make sense of the post title see and this.

Posted in Iraq, Peeves, Politics, Prediction Markets | 2 Comments »

Invention versus innovation

Monday, April 16th, 2007

Will this post get Chris Masse to stop bothering me for a promised post on invention vs. innovation?

Many people have written on this, a few recent links, not all precisely relevant to the question.

One way of putting it is that six billion people generate a huge number of ideas, some number of which could be called inventions. Most are hopeless (the inventions; the people at least manage to survive for a time). Most of the rest are not actively pursued. The only way to test whether an invention is hopeless or useful is to attempt to deliver it at scale. So innovators (think of them as idea entrepreneurs, or whatever) both figure out which inventions are not hopeless and deliver the useful ones at scale. Innovators create all of the surplus, inventors do little more than breathe.

I’ve had an idea in my head for a few years that Masse recently mentioned in passing (not the moronic one he has recently written at length about). Have I done anything with the idea? No. Without implementation the idea is worthless.

Read Robin Hanson’s short The Myth Of Creativity article. Excerpt:

What society needs is not more creativity or suggestions for change but better ways to encourage people to focus on important issues, identify the most promising ideas, and tell the right people about them. But our deification of creativity gets in the way.

Do read the whole thing. Hanson’s target is slightly different than mine.

Before Masse calls me a fan-boy again (I don’t mind), I’ll pose the obvious question: how much of an innovator is Hanson? He’s clearly a fantastic ideas person, but ideas don’t matter. He seems a more productive innovator than the average academic, but that bar is probably very low.

A recent and very apropos Seth Godin post on Meeting Needs spurred me to finally write this. Godin:

Almost no new idea meets the needs of shareholders and CEOs. That’s because most of all they need predictability and apparent freedom from risk. This is why public companies are almost always on the road to disaster. They flee from change in order to do what they think is meeting the needs of those constituents. They fight changes in laws, policies, technologies and markets because their CEO (especially) wants a nice even flight pattern while he racks up big time options.

Shrink wrap software feels safe. Secure. Supported. Beyond reproach.

But…

It turns out that open source can do a brilliant job of meeting their actual needs (lower overhead to install and maintain, higher productivity to use, more stable over time) but the problem is that apparent needs (playing it safe, making your boss happy) almost always get in the way. Until it’s too late. When it’s too late, the competition has leapfrogged you.

Godin also mentions blogging, read the full post. One could substitute prediction markets for open source or blogging. Put that in your marketing pipe and smoke it, Mr. Chris Masse. :-)

Posted in Economics, Open Source, Peeves, Prediction Markets | 16 Comments »

iCandy, Patented !

Tuesday, January 9th, 2007

Tom Evslin says Apple Fails to Reinvent Telecommunications Industry:

Steve Jobs claims that iPhone will “reinvent” the telecommunications sector. Wish it were so but it ain’t!

The design of the phone – no hard buttons, all touch on screen, sounds like everything we expect from Steve and from Apple: it’s all about the GUI and that part’ll be fun. But the business relationship is as old school as it can get: exclusive US distributorship through Cingular
…
Short term this is a good tactic for Apple because it protects the iPod franchise for a while. Long term I think it’s terrible strategy. It invites an endrun from someone who IS willing to reinvent the industry or simply allies themselves with a Cingular competitor.
…
Remember how wonderful the Mac GUI was? But it only ran on machines from Apple. Remember how crappy Windows was at first? But it ran on machines from everyone and their brother. And now there’s Linux – even less restricted – running on anything that moves. Tell me again why it makes sense to have a phone that runs only on a service from at&t (in the US).

Like other Apple products, the is eye candy (ugly to me), but not revolutionary.

It looks like the FIC Neo1973, showing at CES, due to ship this quarter for US$350, running the platform (presentation), will be more in the right direction — unlocked and open for developers. Andy on the openmoko list has a very early comparison.

The Neo1973’s big missing feature, at least initially, is apparently Wi-Fi, due to a lack of open drivers. As a late adopter of gadgets, I can wait. I acquired my first and only mobile phone in 2003, and it’s easy on the eyes.

That said, I’d really like Portable online by 2010 to be true:

This claim is judged YES if and only if, by January 1, 2010, in any state with more than 5 million inhabitants, at least 25% of the adult population are “portably online”. A “state” can be a country or a member state in a federation.

Read more for how “portably online” is defined (the contract was written in 1995). My current guess (and the market’s; last trade at 30) is that without a more significant revolution than we’re seeing the criteria won’t be met before 2010, but not terribly long after.

OpenMoko via Jon Phillips. Second word in post title refers to a silly slide found at Engadget.

Posted in Computers, Open Source, Patents, Peeves, Prediction Markets | 5 Comments »

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