

Why Predictify, a faux prediction market site, failed - mhil
http://www.transcapitalist.com/transcapitalist/2009/8/8/a-faux-prediction-market-hits-the-dust-predictify-closes.html

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gtzi
As the co-founder of <http://askmarkets.com> let me add that Predictify seemed
to have huge operational costs, and the business model of running public play-
money markets, with no specific focus remains to be proven sustainable.
Moreover, it was more of a game and less than a market (prediction or not). So
far, only real money public markets (Betfair, Intrade) and marketplace-as-a-
service providers (Newsfutures, Inkling, Consensus Point) are performing well
enough, to my limited knowledge.

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joshu
Yeah. I don't think prediction markets work without money (well, scarcity...)

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gwern
There are prediction markets that work fine with play money; the Hollywood one
is famously effective and one of the oldest, last I heard.

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mhil
Hollywood Stock Exchange is extremely effective with play money but that is
because the people playing on the site are all part of the same industry and
there are actual ego issues and incentives to make it to the top of the
leaderboard.

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gwern
Sure; the article covers exactly this - you can get by without money
incentives _if_ you have good social incentives. Predictify lacked the latter
and the former, and the top comment seemed to forget this important
conditional.

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tptacek
How are other markets solving the market maker problem?

