Post Prediction Markets

Search 2006

Saturday, January 14th, 2006

I’m not going to make new predictions for search this year — it’s already underway, and my predictions for 2005 mostly did not come true. I predict that most of them will, in the fullness of time:

Metadata-enhanced search. Yahoo! and Google opened Creative Commons windows on their web indices. Interest in semantic markup (e.g., microformats) increased greatly, but search that really takes advantage of this is a future item. (NB I consider the services enabled by more akin to browse than search and as far as I know they don’t allow combinging tag and keyword queries.)

Proliferation of niche web scale search engines. Other than a few blog search services, which are very important, I don’t know of anything that could be called “web scale” — and I don’t know if blog search could really be called niche. One place to watch is public search engines using Nutch. Mozdex is attempting to scale up, but I don’t know that they really have a niche, unless “using open source software” is one. Another place is Wikipedia’s list of internet search engines.

On the other hand, weblications (as Web 2.0) did take off.

I said lots of desktop search innovation was a near certainty, but if so, it wasn’t very visible. I predicted slow progress on making multimedia work with the web, and I guess there was very slow progress. If there was forward progress on usable security it was slow indeed. Open source did slog toward world domination (e.g., Firefox is the exciting platform for web development, but barely made a dent in Internet Explorer’s market share) with Apple’s success perhaps being a speed bump. Most things did get cheaper and more efficient, with the visible focus of the semiconductor industry swinging strongly in that direction (they knew about it before 2005).

Last year I riffed on John Battelle’s predictions. He has a new round for 2006, one of which was worth noting at Creative Commons.

Speaking of predictions, of course Google began using prediction markets internally. Yahoo!s Tech Buzz Game has some markets relevant to search but I don’t know how to interpret the game’s prices.

Posted in Blogs, Computers, Creative Commons, Microformats, Open Source, Prediction Markets, Semantic Web | 2 Comments »

Fraud of War in Iraq

Friday, January 13th, 2006

Cost of War in Iraq, a new paper from Linda Bilmes and Joseph Stiglitz, has already been discussed, at least superficially, on a large number of blogs. Comments at Marginal Revolution helpfully cite a number of related papers.

Bilmes and Stiglitz conservatively project that the total economic costs for the U.S. jurisdiction at $1 to $2 trillion. Direct budgetary costs are projected to be $750 billion to $1.2 billion. I have only skimmed the paper, which looks interesting enough, but nothing really new.

I’ve mentioned increasing cost projects several times last year and before, directly in Trillion dollar fraud (August), $700 billion fraud (July) and A lie halfway fulfilled (January 2005).

I won’t bother to explain the fraud this time, read the past posts. Hint: it involves repeatability.

One thing I’m struck by, skimming comments contesting Bilmes and Stiglitz (the political ones, not the technical ones concerning borrowing costs should be included, though they overlap) is that after the fact, I think many people would claim that the invasion was justified, economically and otherwise, regardless of the final cost. $5 trillion? (NB, that is a hypothetical, not a prediction!) It was worth getting rid of Hussein and deterring would-be Husseins. $10 trillion? Just goes to show how nasty “our” opponents are. $100 trillion? Civilization must be destroyed to save civilization!

All the more reason to be cognizant of probable costs before going to war. There’s not really a need for prediction markets here. Just multiply proponents’ estimates by ten. However, people stupidly believe words that come out of politicians’ mouths. Prediction market estimates could, ironically, provide a countervailing authority.

A better way? See Wright, Scheer, Zakaria, Hardar, Tierney, and Pape.

Posted in Economics, Iraq, Peeves, Politics, Prediction Markets | 1 Comment »

MPrize impact predictions

Monday, January 2nd, 2006

Last June I wrote about Methuselah Mouse Prize related prediction market claims and suggested that claims conditioned on MPrize fundraising goals would be interesting. I just noticed that Mprize.org makes predictions of its own via its ill-explained The Life Line Equation calculator.

I couldn’t find any discussion of the calculator and it is not very prominent on the Mprize.org site. I suspect not much thought was put into it, but the implicit claims are interesting anyway. Given a year of birth, the calculator provides an expected lifespan and an estimate of funds required to reverse aging before you die, as well as a plot like the following:

One problem with the calculator is that it apparently doesn’t use . The average 75 year old is not expected to die next year, as per the calculator.

In the table below I’ve taken the output of the Life Line Equation calculator, supplemented with age-adjusted data from U.S. National Center for Health Statistics life tables (italicized).

Birth Expected
Death		 Funds
Needed
1990 2072 2068 $244,000
1980 2061 2058 $407,000
1970 2050 2049 $800,000
1960 2040 2040 $2,100,000
1950 2029 2031 $9,850,000
1940 2018 2023 $226,800,000
1930 2007 2017 $40,000,000,000

The implication is that to reverse aging by 2029, the MPrize needs $9,850,000, and furthermore that aging could be reversed very shortly with enough incentive and that aging will be reversed 2030 or so regardless of MPrize funding (the funds needed to reverse aging after that date are insignificant, so I think it would be fair to discount the role of the MPrize in reversing aging after that date, if not much sooner).

MPrize funding currently stands at $1.4m, with an additional $1.8m committed. So according to MPrize.org I (born 1970) have nothing to worry about. Hooray!

Well, perhaps not. The calculator seeems pretty poorly conceived and implemented. Still, it would be very interesting to obtain estimates of the impact various levels of MPrize funding might have on anti-aging breakthroughs. Such estimates would be great marketing fodder for MPrize fundraisers–even a very modest impact would save many lives.

As I mentioned before one means of obtaining such (collective) estimates would be to condition anti-aging prediction contracts on MPrize funding levels. Very simplistically, “what is the chance aging will be reversed by 2030?” and “what is the chance aging will be reversed by 2030 if the MPrize raises $100m by 2010?” (Obviously a real claim would define some specific indicator for aging reversal, e.g., a 90 percent drop in 75 year old mortality relative to 75 year old mortality in 2005.)

I still strongly recommend supporting the Methuselah Mouse Prize and the generally.

While I’m peeving away, I wish Rejuvenation Research were an journal. “[M]most important of all: this journal needs to be read.” At $263/year for a personal online-only subscription I don’t think so.

Addendum 20060118: There is a claim on FX very much like the aging reversal claim I outlined above — 90% drop in overall death rate before 2050 relative to 1994 rate. I almost certainly read this claim in the past and forgot about it, but not its general thrust.

Posted in Health, Open Access, Peeves, Prediction Markets | 2 Comments »

Hacking Matter: Levitating Chairs, Quantum Mirages and the Infinite Weirdness of Programmable Atoms

Sunday, January 1st, 2006

I saw author 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.

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

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

Transparent ↔ Opaque
Reflective ↔ Absorptive
Electrically Conductive ↔ Electrically Insulative
Thermally Conductive ↔ Thermally Insulative
Magnetic ↔ Nonmagnetic
Flexible ↔ Rigid
Luminous ↔ Nonluminous

Not all of these could be changed arbitrarily and simultaneously, as many are correlated, but the point is “doped” matter becomes practically . 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.

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 “” and MNT, though research and small scale applications are well underway. As solid state, programmable matter also shouldn’t scare some people 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 , 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?

Posted in Books, Creative Commons, Prediction Markets | No Comments »

Outsourcing charity … to Wikipedia

Friday, December 30th, 2005

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 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.

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

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

…

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.

…

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.

…

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.

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

Posted in Creative Commons, Economics, Health, Intellectual Protectionism, Open Source, Prediction Markets, Public Goods, Wikipedia | 7 Comments »

The Anti-Authoritarian Age

Saturday, December 24th, 2005

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 .

…

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.

…

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 .

Posted in Blogs, Economics, Iraq, Peeves, Prediction Markets, Wikipedia | 3 Comments »

Prediction Markets Summit extract of an extract

Wednesday, December 7th, 2005

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.

Posted in Economics, Open Source, Politics, Prediction Markets | 2 Comments »

WSX06 a loser

Monday, October 31st, 2005

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 , 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.

Posted in Blogs, Prediction Markets | 8 Comments »

Mobs and Markets and WSX06

Sunday, October 30th, 2005

If the Washington Stock Exchange advisory board is any indication, WSX could displace IEM and 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.

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).

Posted in Blogs, Open Source, Politics, Prediction Markets | 9 Comments »

How to not reach critical mass

Thursday, September 29th, 2005

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.
…
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.

Posted in Peeves, Prediction Markets | No Comments »

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