January 27, 2005

DIMACS Workshop on Information Markets

An interesting workshop on information markets (2-4 Feb) has enough of a nice description to lift and post. (Think BlogShares...) Sadly, registration is already closed - I wonder why this one hid its light under a bushel?

DIMACS workshop on information markets

February 2-4, 2005 DIMACS Center, Rutgers University, Piscataway, NJ

A market designed for information gathering and forecasting is called
an information market. Information markets can be used to elicit a
collective estimate of the expected value or probability of a random
variable, reflecting information dispersed across a population of
traders. The degree to which market forecasts approach optimality in
practice, or at least surpass other known methods of forecasting, is
remarkable. Supporting evidence can be found in empirical studies of
options markets, commodity futures markets, political stock markets,
sports betting markets, horse racing markets, market games, laboratory
investigations of experimental markets, and field tests. In nearly all
these cases, market prices reveal a reliable forecast about the likely
unfolding of future events, often beating expert opinions or polls.

Despite a growing theoretical and experimental literature, many
questions remain regarding how best to design, deploy, analyze, and
understand information markets, including both technical challenges
and social challenges.

This workshop will include talks on information markets by a number of
distinguished invited speakers. Speakers will cover a range of topics
including mechanism design, experiments, analysis, policy, and
industry experience. Speakers will include representatives from
academia, industry, and government. The workshop will feature research
talks, opinions, reports of industry experience, and discussion of
government policy from the perspective of a number of fields,
including economics, business, finance, computer science,
gambling/gaming, and policy. See the workshop program for more
details: http://dimacs.rutgers.edu/Workshops/Markets/program.html

The workshop will feature a tutorial session on Wednesday afternoon
(Feb. 2, 2005) to help those new to the field get up to speed. The
workshop will include a panel discussion on the Policy Analysis Market
(a.k.a., "Terror Futures") and a "rump" session where anyone who
requests time can have the floor for five minutes to speak on any
relevant topic. To participate in the rump session, please email David
Pennock: pennockd --AA@TT- yahoo-inc.com.

Workshop Program:

tentative schedule, subject to change

Wednesday, February 2, 2005

Tutorial Session I

12:00 - 1:30 Lunch and Registration - 4th Floor, Lounge, CoRE Building
Registration for the tutorial will be
limited to the first 60 registrations.

1:30 - 3:00 Information Markets I: Examples, Rules, History, Mechanics,
Studies, Participants, Ambiguity, Laws
Joyce Berg, Accounting, University of Iowa

3:00 - 3:30 break

Tutorial Session II

3:30 - 5:00 Information Markets II: Theory, Outputs, Inputs, Foul Play,
Combinatorics, Applications
Robin Hanson, Economics, George Mason University

Thursday, February 3, 2005

8:15 - 8:45 Registration and Breakfast - 4th Floor, Lounge, CoRE Building

8:45 - 9:00 Welcome and Opening Remarks
Fred Roberts, DIMACS Director and
David Pennock, Yahoo! Research Labs

Session: Policy, Politics, & Open Questions

9:00 - 9:30 Michael Gorham, Business, Illinois Institute of Technology

9:30 - 9:55 Robert Hahn, AEI-Brookings Institute

9:55 - 10:20 Information Markets and Politics
Adam Meirowitz, Politics, Princeton University and
Joshua Tucker, Public and International Affairs, Princeton University

10:20 - 10:45 Five open questions about prediction markets
Justin Wolfers, Business, University of Pennsylvania

10:45 - 11:15 break

Session: Experimental Economics

11:15 - 11:40 An Experimental Test of Combinatorial Information Markets
John Ledyard, Humanities and Social Sciences,
California Institute of Technology

11:40 - 12:05 Information markets and decision makers
Tony Kwasnica, Management Science, Pennsylvania State University

12:05 - 12:30 Information aggregation: Experiments and industrial applications
Kay-yut Chen, Hewlett Packard Labs

12:30 - 2:00 Lunch

Session: Business Models, Industry & Field Experience, Part I

2:00 - 2:15 Internal markets: Why and for who?
Carol Gebert, Incentive Markets

2:15 - 2:30 Tee Time with Admiral Poindexter
Todd Proebsting, Microsoft Research

2:30 - 2:45 Information markets as a platform for improved corporate communications
Steven Ostrover, EconOne

2:45 - 3:00 Challenges of Bringing Information Markets to the Organization
Ken Kittlitz, The Foresight Exchange

3:00 - 3:15 TBA

3:15 - 3:45 break

Session: Design and Implementation

3:45 - 4:10 Carsten Schmidt, Max Planck Institute

4:10 - 4:35 Expert identification via virtual stock markets: Finding
lead users in consumer product markets
Martin Spann, Business and Economics, Frankfurt University

4:35 - 5:00 Are prediction markets robust against manipulation? A lab experiment
Martin Strobel,Economics, Maastricht University

5:00 - 6:00 Rump session
I'm glad to see you've all discovered the Delphi method!
Murray Turoff, Information Systems, New Jersey Institute of Technology

Does money matter?
Emile-Servan Schrieber, Newsfutures

Auto-arbitrage in multi-outcome markets
Emile-Servan Schrieber, Newsfutures

7:30 - 9:00 Banquet - the Holiday Inn in South Plainfield

Friday, February 4, 2005

8:30 - 9:00 Registration and Breakfast - 4th Floor, Lounge, CoRE Building

Session: Economics, Finance, and Gambling

9:00 - 9:30 Leighton Vaughn Williams, Economics, Nottingham University

9:30 - 9:55 Manipulation in prediction markets: Evidence from historical
and contemporary election markets
Koleman Strumpf, Economics, University of North Carolina

9:55 - 10:20 Manipulators increase information market accuracy
Robin Hanson, Economics, George Mason University

10:20 - 10:45 Information aggregation and manipulation in an experimental market
Ryan Oprea, Economics, George Mason University

Session: Iowa Electronic Market

11:15 - 11:40 George Neumann, Economics, University of Iowa

11:40 - 12:05 Public signal bias and prediction market accuracy
Thomas Gruca, Marketing, University of Iowa

12:05 - 12:30 Searching for Google's value: Using prediction markets
to forecast market capitalization prior to an IPO
Thomas Rietz, Finance, University of Iowa

12:30 - 2:00 Lunch

Session: Business Models, Industry & Field Experience, Part II

2:00 - 2:15 HedgeStreet: An introduction
Russell Andersson, Hedgestreet.com

2:15 - 2:30 Emile Servan-Schreiber, Newsfutures

2:30 - 2:45 Chris Hibbert, CommerceNet

2:45 - 3:00 Emphasizing the mundane: Making a business of information markets
Charles Polk, Common Knowledge Markets

3:00 - 3:15 TBA

Session: Computation

3:45 - 4:10 Computational complexity issues in information markets
Lance Fortnow, Computer Science, University of Chicago

4:10 - 4:35 Michael Wellman, Computer Science, University of Michigan

4:35 - 5:00 A dynamic pari-mutuel market for hedging, wagering,
and information aggregation
David Pennock, Yahoo! Research Labs

5:00 - 6:00 Post-mortem panel discussion on the Policy Analysis Market
(a.k.a., "Terror Futures")
Robin Hanson, Economics, George Mason University
John Ledyard, Humanities and Social Sciences,
California Institute of Technology
Charles Polk, Common Knowledge Markets

Posted by iang at January 27, 2005 06:20 AM | TrackBack

Hardly surprising that markets are more accurate predictors. They are effectively weighted polls (where the size of the investment reflects confidence in the prediction) with financial rewards for accuracy and penalties (and in extreme cases exclusion from future polls) for the inaccurate.

As with market economies (vs communism), it works because greed is a more powerful motivator for people than is altruism or morality.

Posted by: DigbyT at January 27, 2005 07:58 AM

There's been a play-money implementation of this idea around for years, at http://www.ideosphere.com - The Foresight Exchange (FX). It's had some interesting crypto and security predictions and I think it's been pretty accurate on the whole. Here are some current predictions:

When will 8 GHz CPUs be commercially available? Sometime between March and October of 2007.

What will be the largest number which has been factored by a quantum algorithm, by the end of 2005? This one has been stably predicting between 4 and 5 bits, for the last three years.

What is the chance that a 128 bit key will be brute-force cracked before 2020? 30%.

What is the chance that a 1024 bit number (i.e. RSA modulus) will be factored before 2010? Also 30%.

Will we have a collision in SHA-1 by the end of this year? Not likely, odds are only 7 to 11 %.

Not sure I agree with all of these but they are interesting data points.

Posted by: Cypherpunk at January 27, 2005 05:36 PM

Does anyone play any of these markets for real value? I'm talking about tradesports.com rather than the fx-market where virtual money is used.

Posted by: Darren at January 28, 2005 10:01 AM

Hi --

Information Markets Summit in Chicago, June 7, 2006.

See: http://www.pmcluster.com/CHI.htm


Posted by: John T. Maloney at April 4, 2006 03:34 AM
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