

Crowdsourcing The Crystal Ball - keaneu
http://www.forbes.com/2007/10/13/james-surowiecki-prediction-tech-future07-cx_js_1015wisdom.html?feed=rss_news

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DanielBMarkham
There are a lot of little "gotchas" to remember with this. For instance, each
participant must have a vested stake in the outcome that is to be predicted.

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karzeem
Actually, many markets that only use play money still work quite well, the
Hollywood Stock Exchange being one prominent example.

An active market could be great with real money, though. I haven't heard any
examples of someone making a huge amount of money by trading predictions, but
if such a person emerges, the real-money markets would see a very nice spike
in interest.

I wonder if these things are more or less susceptible than stock exchanges to
people who profit by manipulating outcomes. If the number of people in a
position to perform a manipulation is fairly small (and therefore relatively
traceable), that danger is avoidable. The pool of potential manipulators gets
pretty big, though, with certain types of predictions, like when a person will
die. (In other words, someone could kill the target and make a lot of money.
Let's call it the democratization of insider trading.)

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DanielBMarkham
"Vested interest" can include all sorts of things: money, reputation, glory,
play money, prestige, etc.

And there are all sorts of markets that use real money to trade predictions.
They're called futures markets.

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karzeem
Futures markets deal with financial instruments, not predictions about stuff
like when an iPhone nano will come out.

