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ABSTRACT

Citing recent successes in forecasting elections, movies, products, and other outcomes, prediction market advocates call for widespread use of market-based methods for government and corporate decision making. Though theoretical and empirical evidence suggests that markets do often outperform alternative mechanisms, less attention has been paid to the magnitude of improvement. Here we compare the performance of prediction markets to conventional methods of prediction, namely polls and statistical models. Examining thousands of sporting and movie events, we find that the relative advantage of prediction markets is surprisingly small, as measured by squared error, calibration, and discrimination. Moreover, these domains also exhibit remarkably steep diminishing returns to information, with nearly all the predictive power captured by only two or three parameters. As policy makers consider adoption of prediction markets, costs should be weighed against potentially modest benefits.

Prediction Without Markets

Network Singularity Commentary

Kudos to the researchers, PM Cluster and community sponsor, David Pennock., et al, for Prediction Without Markets. These findings are very encouraging for enterprise prediction markets and collective intelligence.

If the PM, collective intelligence, WoC, collaborative forecasting, etc., innovators are even at parity with traditional enterprise predictive techniques, then it is a major breakthrough.

Recall, all enterprise innovations meet with reactionarism. (Not that this paper is reactionary, per se.) It is an expected and confident sign/stage in the lifecycle.

A far greater concern would be if there was no push-back to a new technique or technology!

See:

http://networksingularity.com/2009/09/22/enterprise-reactionaries.aspx

What happens in the adoption lifecycle is the independent variable, people, adapt and evolve in the context of the new method and context. This is where the authentic enterprise advantages and advancements in productivity, speed, innovation and growth emerge and abide.

Organizations are networked markets. Anything outside these networks is fast becoming irrelevant.

Innovative social media like PMs, collective intelligence, WoC and collaborative forecasting will fundamentally alter the enterprise landscape with confidence. In particular, for PM/CI social media, there are significant cost savings and speed advantages over traditional methods. These advantages, in concert with even modest prediction market improvements in accuracy, makes innovative market-methods a serious plank in Enterprise 2.0.

Are influence ecologies the future of marketing, content, media and publishing?

Thanks to Ross Dawson and the Advanced Human Technologies group for asking that critical question and offering the first glimpse of the Influencer Landscape.

DRIVING FORCES:
A wide array of forces are shifting value and attention to the influence landscape and from traditional media, advertising and marketing.

INFLUENCERS:
There are a wide variety of roles played by influencers, with different dynamics for each in how they influence and how they can be reached.

INFLUENCE MECHANISMS:
Influence requires communication, and today a wide and ever-increasing range of channels, from face-to-face meetings to broadcast TV, are mechanisms to spread influence.

INFLUENCE AGGREGATORS:
While influence flows through many channels, one of the drivers making social media more important is that influence of many is aggregated through a variety of tools.

INFLUENCE NETWORKS:
Influence flows through networks – it cannot be understood as a linear mechanism focused on individual influencers. There are a number of key aspects of influence networks that need to be addressed to tap the power of influence.

- Advanced Human Technologies
Creative Commons Attribution
ShareAlike 2.5 License

“We had the intelligence information, but failed to connect-the-dots."

– US President Barack H. Obama, Jan 5, 2010

See excellent blog by John Crupi, CEO, JackBe: 'We Failed to Connect the Dots'

Join JackBe at the Enterprise Mashup Summit 12 Mar 2010 in SF.

Scholar, academic, student discounts available.

Contact:

Jennifer M. Hulett, Administration and Events
http://www.emusummit.com
jennifer.hulett@emusummit.com
Bus. 714-784-0754 Cell 714-458-3826 Fax 714-249-4734

Local (SF Bay Area) scholars, suppliers or entrepreneurs interested in breakthroughs in innovative mashups & network analytics, please contact Jennifer too. Sponsor and scholar slots exist for the 12 March EMU Summit.

High valence mashup technology is fundamentally advancing high-velocity integration, social network analytics and collective intelligence.

EMU marketplace key findings --

• The enterprise mashup market was worth around $161m in 2008, and is forecasted to grow to $1.74bn by 2013.

• Market growth will be driven by factors including the growing involvement of the major software players, evolving market definition and knowledge about mashups, emerging standards, increased uptake of SOA and cloud computing, and the impact of the recession.

• 32.8% of organizations surveyed by Business Insights used mashups.

• The enterprise mashup market will benefit from the increasing prevalence of software incorporating SOA. Worth $1.4bn in 2008, the SOA platform market will grow to $2.77bn in 2014.

 

- OfficialWire.com
- Companiesandmarkets.com

 

Technorati Tags: Enterprise mashups,enterprise integration,mashup,enterprise mashup,emusummit,EMU Summit,Open Mashup Alliance

 

 

Amazon’s Sharon Chiarella, Vice President, Mechanical Turk, joining sponsors of the Collective Intelligence Summit: Leading Enterprise Social Media and Prediction Markets on 26 Feb 2010 in Seattle, Washington USA.

http://www.pmcluster.com/Prediction%20Markets/SEA10.htm

Secure, online registration now open.

Jennifer M. Hulett, Administration and Events
http://www.pmclusters.com
jennifer.hulett@pmclusters.com
Bus. 714-784-0754 Cell 714-458-3826 Fax 714-249-4734
Skype: Jen_Hulett
Connect with me at Twitter Facebook LinkedIn

Happy new year and new decade!

On behalf of the Pacific Northwest Action/Research Network, the global collective intelligence community and the Prediction Markets Cluster, please accept this pre-invitation to your 'Collective Intelligence Summit' on Friday, 26 February 2010 in Seattle, Washington, USA.

Today begins the special, discounted Early-Bird Registration. It is until 22 Jan 2010. Simple, secure online registration is available at your event page.

http://www.pmcluster.com/Prediction%20Markets/SEA10.htm

Please contact me, Jennifer, directly with questions on registration, sponsorship, speaking opportunities, press credentials and academic/student discounts.

Most sincerely,

Jennifer

Jennifer Hulett

www.pmclusters.com

jennifer.hulett@pmclusters.com

Connect with me at LinkedIn & Facebook

Bus. 714-784-0754

Cell 714-458-3826

Skype: Jen_Hulett

Twitter: pmclusters

New Open Source Tools

Friday, January 22, 9:30am – 12:30
No-Cost Registration Required

Take data from common social media sources (including enterprise discussions and online communities, twitter, flickr, your own email, and facebook.)

Find the experts, the bridges and brokers, discover major clusters and identify leaders.

Easy to use open source tools for network analysis open doors to many new types of questions in social science research.

This workshop provides an overview of Social Network Analysis and its application to social media.  Learn how to use the NodeXL social network analysis add-in for Excel to:

Marc A. Smith is a sociologist and Chief Social Scientist at Connected Action Consulting Group, a provider of quality social media analysis platforms and systems.  Smith specializes in the social organization of online communities and computer mediated interaction. He founded and managed the Community Technologies Group at Microsoft Research in Redmond, Washington and now leads the development of social media reporting and analysis tools for Connected Action Consulting Group. Smith is the co-editor with Peter Kollock of Communities in Cyberspace (Routledge), and conducts empirical studies of online collective behavior (see: http://delicious.com/marc_smith/Paper). Smith received a B.S. in International Area Studies from Drexel University in Philadelphia in 1988, an M.Phil. in social theory from Cambridge University in 1990, and a Ph.D. in Sociology from UCLA in 2001. He is an affiliated faculty member in the Department of Sociology at the University of Washington and the College of Information Studies at the University of Maryland.

Space is limited.
No-cost registration is required.  dmacugay@stanford.edu

#124 Wallenberg Hall

The revolution in social business computing is a central theme of the network singularity. Enterprise mashups depend entirely on well-informed, fluid social networks, innovative, secure access mechanisms, and open, non-deterministic information syndication practices. Enterprise mashup leadership and people practices are focused on coordination, cultivation, collaboration and conversation. It’s why the periodic transorganizational clustering activities are critical to your success and prosperity.

We want you to know about your next Cluster Action/Research event, the Enterprise Mashups Summit - http://www.emusummit.com/. Your event is on Friday, March  12th, 2010, in San Francisco, California USA.

Learn first-hand from enterprise users, business leaders, mashup innovators and practice experts how to achieve fundamental advancements in secure, high velocity enterprise integration. The

creates outcomes that provide integration, productivity and innovation benefits to business, education, government, institutions and civil society.    

The low-cost, high-value Enterprise Mashups Summit is the leading open industry event and user community for 21st Century enterprise integration. Community members and conference participants are business enterprise users, scholars, developers, service providers, institutional users and stakeholders. They originate from the enterprise, media, government and education.

The Enterprise Mashups Summit conference and community is agnostic and open. The collaboration consists of business users, vendors, technologists, developers and thought leaders. The summit focus is on creating critical connections, nurturing relationships and pursuing comprehensive mastery of enterprise mashups.

Registration includes meals, books, parking, refreshments, materials, Wi-Fi access, reception, materials, group workspace and discounts. Registration in advance required. No on-site registration. There are attractive group discounts for your IT leadership teams, KM people, developers and other business stakeholder groups.

Click Here to Register for the Summit

The Enterprise Mashups Summit leadership retreat expands practice excellence for enterprise integration methods, techniques, applications and technologies. This is achieved by providing awareness, diffusion, adoption and Next Practices. The

Enterprise Mashups Summit community defines and leads the open integration practices, tools and theories of the 21st Century Enterprise.

Testimonials: http://bit.ly/5bFIcq

http://consensuspoint.com

What Is a Prediction Market?

Most people think of a market as providing a platform for the exchange, through trading, of something of value — a good or a service.This is indeed the primary function of markets at the industry level. A prediction market is based on a market mechanism and is an efficient way to aggregate opinions about value of what investments an organization should makeor whether an outcome will happen in the future. Additional benefits of prediction markets are improved decision-making and improved employee morale.

Prediction markets are an effective way to eliminate abias in information through tapping diverse minds. According to our Chief Scientist Robin Hanson, “The trouble with humans, it seems, is that even when we’re smart, we have access to imperfect information and follow the group think of our peers. Because we often disagree with other groups, we band together and end up agreeing too much with our own teams. No single leader can overcome such biases and data gaps to predict with certainty whether an action will succeed or fail. But Hanson suggests markets can do just that.”

Prediction markets produce forecasts that are, on average based on experience, more accurate than those produced from traditional forecasting approaches, largely because markets incorporate more information,run continuously, and aggregate employees’ opinions in an anonymous way. With the prediction market functioning continuously, markets will disclose the impacts of new information far faster than any alternative approach. Because the common disincentives for employees to reveal bad news to managers have been eliminated in a prediction market, this system gathers opinions from minds thatare sometimes silent. In some instances, a prediction market can serve as an effective early business indicator for leaders— by providing signals that a variance of say 10% related to a critical business initiative has been indicated by the market, allowing business leaders to assess and potentially take action.

The Value of a Prediction Market

Prediction markets offer a unique ability to incorporate information-aggregation and the predictive power of markets within traditional corporate structures. A prediction market is established within the company to generate predictions on issues of interest in a manner that directly addresses the foundational communication constraints. Incorporating this type of approach in a geographically distributed and virtually managed organization can provide significant benefits by promoting a smart forum with a goal to drive final analysis of influence and intelligence in a particular area. Additionally, a collaborative approach can increase employee engagement, raise energy levels and offer a unified platform for employees to be heard, while leveraging the ability for leaders to receive input from all minds in the company.

How Prediction Markets Work

A prediction market works similarly to a stock exchange.A “stock” is defined to reflect an issue of interest to your organization such as the product’s readiness to launch, sales forecasts of the company’s products,viable new products or services, and other in-depth insights of employees.These dynamic insights from your employees can be identified by geographic region, business unit or through other demographics.

Your organization’s employees will participate as traders on the basis of their perceived understanding of future changes and prospects.With the protection of anonymity (eliminating the fear of reprisals for offering unpopular opinions) and a well-defined incentive structure, employees are motivated to acquire relevant information and contribute their best assessments. Traders buy and sell shares of the stock based on beliefs about future occurrences and their desire to increase the value of their portfolio.When an employee, for example, observes that the price of the stock is less (or more) than his/her expectation related to the topic, he/she will buy (or sell)the stock, thereby driving its price up (or down).

As a result of this dynamic, the prediction market stock price serves as an ongoing real-time forecast of future results associated with the question being asked. It also continuously reflects traders’ aggregated assessment of future results in the same way that the trading of a company’s stock on a stock exchange continuously reflects the trading community’s collective assessment of the market value of the company.