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  • Title Idea futures markets and technology foresight Date July 9, 2004 Author(s) Dr Yves Pigneur University of Lausanne (HEC) and University of Bristish Columbia (Sauder) [email_address] Abstract Organizations scan their environment in order to understand the external forces of change that may affect their future position so that they can develop effective responses and strategies. We are specially interested in assessing technological (ICT) environments. For assessing such landscapes, we privileged a scenario planning approach, and investigated different models, such as actor-issues analysis, disruptive technology detection, and multi-criterion decision models. Moreover, we developed some computer-aided design and visualization tools.The last model, we are examining is the so-called idea futures, or prediction markets. This recent innovation suggests to transfer the tools and methods for trading commodity and financial futures to futures markets for ideas. Such electronic markets trade on propositions whether events will occur, have applications to decision-making, and has proven itself to be an accurate predictor of future events (i.e. votations). The price of an idea aggregates believes that the proposition will be realized.This talk will briefly present the concept of this new kind of e-market, with different uses and case studies (Iowa Electronic Markets, Foresight Exchange, Hewlett-Packard, ... and the criticized FutureMAP). And, last, we will sketch a NSF proposal for designing and deploying such an idea market (ideally with real money!) inside the MICS community, for assessing the emergence and the evolution of mobile technologies. File /ideaMarket.ppt URL: http://inforge.unil.ch/yp/TALK/slides/ideaMarket.ppt Version 0.1 Versions Dates Remarks 0.1 January 2005 Inforge workshop
  • Identify general, broad, driving forces, which are applicable to essentially all scenarios Identify a variety of PLAUSIBLE trends within each driving force topic trends that vary depending on your assumptions so you get positive and negative perspectives Combine the trends so you get a series of scenarios for example, mostly positive trends from all driving force topics would give a positive scenario The number of scenarios should be around 3-5 (positive, negative, neutral) Scenarios are good because one can play "what if" games The major use is UNDERSTANDING the situation rather than trying to predict the future Difficulty to identify the "right" scenario to include
  • Giovanni Camponovo, Sandrine Debetaz & Yves Pigneur, A comparative analysis of published scenarios for m-business, m-business'2004 Abstract A number of scenario planning studies have been conducted in relation to mobile business in the recent years for analyzing major trends and challenges in the wireless domain. Unfortunately, most of them ignore the other ones and never try to compare their results with the others. Now this validation phase is an important phase in a design science process. Without any kind of validation, the scenario approach will always have difficulties to be accepted as a pertinent method. This article is a first step towards this validation phase. It synthesizes and compares a representative set of these scenario proposals in order to extract the scenarios which are accepted as likely by most authors as well as a set of less frequent, but not less interesting, scenarios so as to provide some insight about the potential futures for the m-business industry. For crosschecking the proposed scenarios, we adopted three different frameworks for classifying and examining the possible futures from many perspectives such as the role of the stakeholders, mainly the operators and the public authorities, the competition and collaboration in m-business, and several other technological, social, and political issues. Magali Dubosson, Yves Pigneur & Jean-Claude Usunier, Business models for music distribution after the P2P revolution , Wedelmusic'2004 ABSTRACT The goal of this paper is to sketch the value chain and the business models of the online distribution of music. The perspective of the online digital music market is rather deceiving but the opportunities seem to remain high. Considering the rise of the P2P networks of free music digital files, it seems reasonable to assume this new way to distribute music meets consumer needs. Based on a review of the literature and executive interviews, the paper presents the traditional distribution models; then it addresses how P2P piracy deals with the copyright issues, and describes some emergent business models that could be an answer to illegal digital music distribution. Marc Laperrouza & Yves Pigneur, China's broadband wireless industry - A prospective approach , Pacis'2004 CONCLUSION Based on the assessment of the broadband wireless industry in China, its main stakeholders, and the issues analyzed during the interviews we conducted, further research has to be done for validating the assumption that the three following scenarios describe possible future for the wireless industry in China: Techno-nationalism and the public good (regulation rules). - In this scenario the government maintains its central role and dictates the development of the industry to the other actors. Level playing field (market, i.e. operators, rules). - In this scenario, operators and equipment manufacturers take a pro-active stance towards industry development. Techno-fetichism (technology rules). - In this scenario, continuous emergence of alternative technologies threaten the government’s attempt to regulate and redistribute the strength of players in the value chain.
  • Ask: Price at which broker/dealer is willing to sell. Same as "Offer". Bid: Price at which broker/dealer is willing to buy.
  • What is the IEM? The IEM is an on-line futures market where contract payoffs are based on real-world events such as political outcomes, companies' earnings per share (EPS), and stock price returns. The market is operated by University of Iowa Henry B. Tippie College of Business faculty as an educational and reseach project Who can participate in the IEM? The IEM is operated for research and teaching purposes. All interested participants world-wide can trade in our political markets. Other markets--such as the earnings and returns markets--are open only to academic traders. Are the participants playing with real money? YES. Trading accounts can be opened for $5 to $500. Participants then use their funds to buy and sell contracts. Traders therefore have the opportunity to profit from their trades but must also bear the risk of losing money
  • Ask: Price at which broker/dealer is willing to sell. Same as "Offer". Bid: Price at which broker/dealer is willing to buy.
  • Welcome to the Foresight Exchange! This is the place to test your ability to predict the outcome of future events. It is also the place to check the current odds of upcoming events and make your own bets. Remember, this is not real money! Are you finding that your time is vanishing and you are unable to keep up with what's going on in the world? Would it be nice to be able to check out the chances of future events that interest you quickly and easily? How about receiving a notice through email regarding the events that you are interested in. You can do this and more on the Foresight Exchange.At the Foresight Exchange you are able to use your "funny money" (FX-bucks) to bet on the liklihood of future events. Membership on the Foresight Exchange is being offered on a free trial basis so you can get used to the concept and have some fun. The General Principle The Foresight Exchange is a new form of entertainment. It combines the real-time interactive potential of the World Wide Web with a game of predictive skill. The basic idea behind the Foresight Exchange(FX) is making bets. The purpose in FX is to bet wisely on future events and place your bets to achieve the highest score. At the Foresight Exchange you bet against the other players. This is the award winning Foresight Exchange (formerly, "Idea Futures Market" , as seen in Wired ). Imagine a betting pool or market on most disputed science questions, with the going odds available to the popular media, and treated socially as the current academic consensus. Imagine that academics are expected to "put up or shut up" and accompany claims with at least token bets, and that statistics are collected on how well people do . Imagine that funding agencies subsidize pools on questions of interest to them, and that research labs pay for much of their research with winnings from previous pools. And imagine that anyone could play, either to take a stand on an important issue, or to insure against technological risk. This would be an "idea futures" market, which I offer as an alternative to existing academic social institutions. Somewhat like a corn futures market, where one can bet on the future price of corn, here one bets on the future settlement of a present scientific controversy...From a background article (92k) by Robin Hanson .That's the goal. In the meantime, let's test out the concept, develop consensuses, and have some fun.As the name implies, an "idea futures" market is one in which the commodities are ideas - more specifically, claims about future events. The market value of an idea is expressed as a percentage between 0 and 100, representing the market's consensus as to the probability of the claim being true. Players may buy either "yes" or "no" coupons on a particular claim at the current market price or book an order at what they estimate is a fair price. Normally, at a specific date set as part of the claim, a designated judge will rule the claim either true or false, at which point either "yes" or "no" coupons are redeemed for .00, depending on the outcome. Besides potential monetary gain, an idea futures market offers the possibility of financing speculative ventures and the knowledge obtained from observing the market consensus on specific claims.
  • HSX is just like the real stock market, only way more fun! Buy shares of your favorite actors and their new movies. Watch their values rise or fall based on their success. Prices soar with a blockbuster opening at the box office and plummet with a bomb no one went to see.
  • TradeSports.com is a person-to-person trading "Exchange". It allows you to trade in the most innovative, transparent and fun way on sporting, entertainment and similar events. TradeSports members trade directly with each other, bypassing the Sportsbook.When you trade sports you are pitting your wits against an other member of TradeSports. TradeSports provides the platform whereby players can wager between themselves without paying a Sportsbook margin or vig. The winning player will receive the profits, the losing player pays the loss. Learn more about why Trading Sports is better than betting with a Sportsbook . With no vig, no juice, no artificial spread, TradeSports charges a fixed $.04 transaction fee per matched transaction bet/lot that you trade. Odds/Prices on TradeSports are usually much better than those available elsewhere, as the prices are established by you and other TradeSports members at prices you want to trade at. TradeSports has long-term offers like "who will win the March Madness tournament" and short term offers like "who will win tonight's game". All major sporting, entertainment and political events are covered. Incorporated and authorized in 2002 to offer its services, TradeSports Exchange Limited is a Dublin based Republic of Ireland limited company. The Allied Irish Bank provides banking facilities. The company auditors are PriceWaterhouseCoopers. TradeSports has been featured on CNBC and other various sports and business programs. For Press enquiries, please contact [email_address] . com Read recent press coverage on TradeSports here >>
  • Analysts often use prices from various markets as indicators of potential events. The use of petroleum futures contract prices by analysts of the Middle East is a classic example. The Policy Analysis Market (PAM) refines this approach by trading futures contracts that deal with underlying fundamentals of relevance to the Middle East. Initially, PAM will focus on the economic, civil, and military futures of Egypt, Jordan, Iran, Iraq, Israel, Saudi Arabia, Syria, and Turkey and the impact of U.S. involvement with each. Three types of futures contracts will be offered on PAM: ・ Quarterly contracts based on data indices that track economic health, civil stability, military disposition, and U.S. economic & military involvement in Egypt, Iran, Iraq, Israel, Jordan, Saudi Arabia, Syria, and Turkey ・ Quarterly contracts that track global economic and conflict indicators ・ Specific possible events (e.g., U.S. recognition of Palestine in the first quarter of 2005) When trading starts on October 1, 2003, there will be contracts of the first two types that mature at the end of the 4th quarter 2003, 1st 2004, 2nd 2004, and 3rd 2004. On January 1, 2004, contracts that mature at the end of the 4th quarter 2004 will be issued. In this way, the forward view of PAM will be maintained at one year. Contracts of the third type will be issued into PAM as specific potential events of interest are identified. The contracts traded on PAM will be based on objective data and observable events. These contracts will be valuable because traders who are registered with PAM will use their money to acquire contracts. A PAM trader who believes that the price of a specific futures contract under-predicts the future status of the issue on which it is based can attempt to profit from his belief by buying the contract. The converse holds for a trader who believes the price is an over-prediction ミ she can be a seller of the contract. This price discovery process, with the prospect of profit and at pain of loss, is at the core of a market ユ s predictive power. The issues represented by PAM contracts may be interrelated; for example, the economic health of a country may affect civil stability in the country and the disposition of one country ユ s military may affect the disposition of another country ユ s military. The trading process at the heart of PAM allows traders to structure combinations of futures contracts. Such combinations represent predictions about interrelated issues that the trader has knowledge of and thus may be able to make money on through PAM. Trading these trader-structured derivatives results in a substantial refinement in predictive power. The PAM trading interface presents A Market in the Future of the Middle East . Trading on PAM is placed in the context of the region using a trading language designed for the fields of policy, security, and risk analysis. PAM will be active and accessible 24/7 and should prove as engaging as it is informative. Copyright ゥ 2003 Net Exchange. All rights reserved.
  • ABSTRACT: The accuracy of prediction markets has been documented for both markets based on real money and those based on play money. To test how much extra accuracy can be obtained by using real money versus play money, we set up a real-world on-line experiment pitting the predictions of TradeSports.com (real money) against those of NewsFutures.com (play money) regarding American Football outcomes during the fall-winter 2003-2004 NFL season. As expected, both types of markets exhibited significant predictive powers, and remarkable performance compared to individual humans. Perhaps more surprisingly, the play-money markets performed as well as the realmoney markets. We speculate that this result reflects two opposing forces: real-money markets may better motivate information discovery while play-money markets may yield more efficient information aggregation.
  • Market prices are well known to efficiently collect and aggregate diverse information regarding the value of commodities and assets. The role of markets has been particularly suitable to pricing financial securities. This article provides an alternative application of the pricing mechanism to marketing research - using pseudo-securities markets to measure preferences over new product concepts. Surveys, focus groups, concept tests and conjoint studies are methods traditionally used to measure individual and aggregate preferences. Unfortunately, these methods can be biased, costly and time-consuming to conduct. The present research is motivated by the desire to efficiently measure preferences and more accurately predict new product success, based on the efficiency and incentive-compatibility of security trading markets. The article describes a novel market research method, provides insight into why the method should work, and compares the results of several trading experiments against other methodologies such as surveys, concept testing and conjoint analysis. Various summary metrics for stock prices are compared based on predictive accuracy, as are alternatives game objectives on the part of the traders.
  • In this paper we report about a first industrial application of an experimental stock market, which was designed to support project management decisions. People who work in a software development project were motivated to trade in simple real money double auction markets. The design of these markets was focused on the date the project should be finished and should help to aggregate privat and semi-public information on the progress of the project more quickly than conventional management techniques. Part one of this paper present an overview of the first half of the experiment - the experimental setup and the first 2 months of trading.
  • News, Entertainment, Discussion Newsbet provides a fresh perspective on news, current affairs, and popular culture. On Newsbet, you don't just read about it...you speculate on it. And by looking at the prices others are willing to pay, you can also see what others are predicting about the latest issues. Newsbet.com lets you enjoy the experience of speculating on the news without the risk of losing a penny! For those who would prefer to use real money, Newsbet will be releasing an additional currency site soon.... When you create an account , you are issued with N$1000 (that's Newsbet Dollars) when you begin, and receive N$500 on the first day of every month. Bet on Something You Care About Do you think John Kerry will win the next USA election? Will the Williams sisters square off in a Grand Slam Tournament? How many Spice Girls will remain at the end of 2004? Newsbet lets you test your skills on a variety of topics, ranging from politics to sport to movies and music. See What Others are Predicting On Newsbet, we don't set the prices...you do! Like the stock market, the prices reflect how much newsbet players have been willing to pay for certain outcomes to come true. So if people have paid more for "Kerry" coupons than Bush"coupons", that's a good indication the public feels it is more likely that Al Gore will win. Talk About Hot Topics Each Newsbet topic will soon link to a discussion forum. You'll be able to talk with others about what's been happening and discuss the likelihood of different outcomes occurring. How Does Newsbetting Work? You bid to purchase Newsbet coupons. Each coupon pays N$1 if its outcome becomes true. So if you hold an "John Kerry" coupon, you will receive N$1 if he wins. The more likely he is to win, the more you'll pay for the coupon. If Kerry is very likely, his coupons might be selling for N$0.80 and Bush coupons will be selling for N$0.20. If you buy 100 "Kerry" coupons, you'll pay N$80 to win N$100. If you buy 100 "Bush" coupons, you'll pay N$20 to win N$100. In this way, Newsbet acts like a stock market. You say how much you want to bid for a coupon, and Newsbet tries to match you with people bidding in the opposite way. Selling Out Not content with buying coupons? Newsbet also lets you sell coupons you own. Let's say you bought "George W. Bush" coupons when they were N$0.20. Bush announces there will be no new taxes and immediately raises his chances to N$0.50. You can now sell your coupons at a profit of N$0.30...you've more than doubled your money and the election is months away!
  • ZMarket How could you implement experimental economic markets easily? Table of contents [ hide ] 1 Overview 2 Current Activities 3 Related Work 1 Prediction Market Resources [ edit ]OverviewMarkets are quintessential decentralized problem-solving systems. The act of trading spreads information about what's valuable, thereby directing people's attention and activity without explicit coordination. If one believes markets are a promising tool for attacking problems that cross organizational boundaries, why are there so few examples of them in use today? There have been several notable experimental economic markets, such as Hewlett-Packard's future-sales predictions (profiled most recently in Tom Malone's paean to decentralization, The Future of Work ), or the myriad politicial markets in elections (apparently, all the way back to the days of Abraham Lincoln !). We suspect that one reason that markets have not been adopted more widely, or at least explored in a wider range of settings, is the absence of any freely-available standard toolkits. Granted, many kinds of new public prediction markets are hard to introduce given US gambling regulations in each state, but at least internal markets would be more easily constructed if a common foundation were available. A shared infrastructure would also mean that each new application could add to the reusable toolkit rather than rebuilding the ground layer yet again. A research platform for electronic markets would respond to the call for shared infrastructure in a 1997 NSF workshop report on Netlabs (see our blog post ). [ edit ]Current ActivitiesLed by CommerceNet Labs Associate Chris Hibbert , we are preparing a white paper titled zMarket: An Open-Source Platform for Developing Decentralized Markets to consider funding it as a major program within zLab; we plan to present it at the DIMACS Workshop on Markets as Predictive Devices in Rutgers, NJ on Feb. 2-4, 2005. It will cover 1) motivation, applications, and scenarios for an open-source market toolkit; 2) background reading and motivation on the theoretical power of markets as decentralized decision-making and prediction devices; and 3) a detailed plan for building such a toolkit and proactively engaging with partners in academic, nonprofit, and commercial settings. One primary criteria for the proposal will be a clear, concrete plan for delivering interim demos and feedback checkpoints for phasing in CommerceNet's investment. Earlier, Chris prepared an informal presentation advocating the creation of this program. [ edit ]Related Work[ edit ]Prediction Market Resources ▪ MarketToolkits , Open Source and otherwise ▪ Market Experiments inside companies ▪ BackgroundReading on Prediction Markets ▪ PredictionMarketLinks Many more links on Prediction Markets
  • ZMarket How could you implement experimental economic markets easily? Table of contents [ hide ] 1 Overview 2 Current Activities 3 Related Work 1 Prediction Market Resources [ edit ]OverviewMarkets are quintessential decentralized problem-solving systems. The act of trading spreads information about what's valuable, thereby directing people's attention and activity without explicit coordination. If one believes markets are a promising tool for attacking problems that cross organizational boundaries, why are there so few examples of them in use today? There have been several notable experimental economic markets, such as Hewlett-Packard's future-sales predictions (profiled most recently in Tom Malone's paean to decentralization, The Future of Work ), or the myriad politicial markets in elections (apparently, all the way back to the days of Abraham Lincoln !). We suspect that one reason that markets have not been adopted more widely, or at least explored in a wider range of settings, is the absence of any freely-available standard toolkits. Granted, many kinds of new public prediction markets are hard to introduce given US gambling regulations in each state, but at least internal markets would be more easily constructed if a common foundation were available. A shared infrastructure would also mean that each new application could add to the reusable toolkit rather than rebuilding the ground layer yet again. A research platform for electronic markets would respond to the call for shared infrastructure in a 1997 NSF workshop report on Netlabs (see our blog post ). [ edit ]Current ActivitiesLed by CommerceNet Labs Associate Chris Hibbert , we are preparing a white paper titled zMarket: An Open-Source Platform for Developing Decentralized Markets to consider funding it as a major program within zLab; we plan to present it at the DIMACS Workshop on Markets as Predictive Devices in Rutgers, NJ on Feb. 2-4, 2005. It will cover 1) motivation, applications, and scenarios for an open-source market toolkit; 2) background reading and motivation on the theoretical power of markets as decentralized decision-making and prediction devices; and 3) a detailed plan for building such a toolkit and proactively engaging with partners in academic, nonprofit, and commercial settings. One primary criteria for the proposal will be a clear, concrete plan for delivering interim demos and feedback checkpoints for phasing in CommerceNet's investment. Earlier, Chris prepared an informal presentation advocating the creation of this program. [ edit ]Related Work[ edit ]Prediction Market Resources ▪ MarketToolkits , Open Source and otherwise ▪ Market Experiments inside companies ▪ BackgroundReading on Prediction Markets ▪ PredictionMarketLinks Many more links on Prediction Markets
  • ZMarket How could you implement experimental economic markets easily? Table of contents [ hide ] 1 Overview 2 Current Activities 3 Related Work 1 Prediction Market Resources [ edit ]OverviewMarkets are quintessential decentralized problem-solving systems. The act of trading spreads information about what's valuable, thereby directing people's attention and activity without explicit coordination. If one believes markets are a promising tool for attacking problems that cross organizational boundaries, why are there so few examples of them in use today? There have been several notable experimental economic markets, such as Hewlett-Packard's future-sales predictions (profiled most recently in Tom Malone's paean to decentralization, The Future of Work ), or the myriad politicial markets in elections (apparently, all the way back to the days of Abraham Lincoln !). We suspect that one reason that markets have not been adopted more widely, or at least explored in a wider range of settings, is the absence of any freely-available standard toolkits. Granted, many kinds of new public prediction markets are hard to introduce given US gambling regulations in each state, but at least internal markets would be more easily constructed if a common foundation were available. A shared infrastructure would also mean that each new application could add to the reusable toolkit rather than rebuilding the ground layer yet again. A research platform for electronic markets would respond to the call for shared infrastructure in a 1997 NSF workshop report on Netlabs (see our blog post ). [ edit ]Current ActivitiesLed by CommerceNet Labs Associate Chris Hibbert , we are preparing a white paper titled zMarket: An Open-Source Platform for Developing Decentralized Markets to consider funding it as a major program within zLab; we plan to present it at the DIMACS Workshop on Markets as Predictive Devices in Rutgers, NJ on Feb. 2-4, 2005. It will cover 1) motivation, applications, and scenarios for an open-source market toolkit; 2) background reading and motivation on the theoretical power of markets as decentralized decision-making and prediction devices; and 3) a detailed plan for building such a toolkit and proactively engaging with partners in academic, nonprofit, and commercial settings. One primary criteria for the proposal will be a clear, concrete plan for delivering interim demos and feedback checkpoints for phasing in CommerceNet's investment. Earlier, Chris prepared an informal presentation advocating the creation of this program. [ edit ]Related Work[ edit ]Prediction Market Resources ▪ MarketToolkits , Open Source and otherwise ▪ Market Experiments inside companies ▪ BackgroundReading on Prediction Markets ▪ PredictionMarketLinks Many more links on Prediction Markets
  • How making wagers on the future can make it happen faster by Robin Hanson When a science question - about, for instance, the greenhouse effect, the "Star Wars" missile-defense system, or pesticide toxicity - becomes relevant to public policy, few of us are confident that the opinions expressed in popular media or in congressional testimony reflect the best available information. Instead, we fear bias - either from corporate interests, politically correct doomsayers, or just resistance to new ideas. [1] So consider a radical, market-based alternative for reaching scientific consensus. Imagine a betting pool on disputed science questions, where the current odds are treated as the current intellectual consensus. For example, people might bet on whether cold fusion will be used to produce power by the year 2020. Right now the odds would be fairly low - say 20-to-1 against. But as the results of new research became known, and if more people became convinced that cold fusion worked, the odds would rise. And if cold fusion became a reality by 2020, those early supporters would make a bundle. Such betting markets would become "idea futures" markets - like corn futures markets, except you'd bet on the future settlement of a scientific controversy instead of the future price of corn. The system could increase the public's interest and role in science, and betting odds could serve as a scientific barometer to guide mass media and public policy. Here's an example of how it might work: Ann, a graduate student in biology, proposes a new theory about how AIDS destroys the immune system. If true, her theory has important implications. But relevant academic insiders insist the theory is wrong and refuse to discuss the issue further. Today, Ann could keep working on her own, or she could call a news conference. But using the idea futures market, Ann would have a new option. First, she would pay a reputable judging organization to eventually [2] declare a verdict on the correctness of her theory. Then Ann would pay someone else to create a market where anyone could bet on this verdict. If policy makers take the current market odds seriously, Ann need only post offers to bet in favor of her theory at odds of, say, 1-to-3. Now, if the academic insiders want their views reflected in policy, they would have to bet against the theory in order to drive down the odds (to say [3] , a 5 percent chance that Ann is correct). Naysayers could no longer suppress Ann with silence or ridicule. True, if the academic insiders had more money to spend, they might win this fight, at least for now. But with more money at stake, speculators might well take a keen interest in Ann's theory. Science patrons and policy makers might decide the question interests them enough to subsidize betting markets on Ann's theory, promoting research without taking sides. Research labs could compete to win the prizes these subsidies create, investing their own money in the hope of later rewards. Finally, as research moved the weight of evidence - and the market odds - in Ann's favor, she and the speculators who supported her could sell their bets at a healthy profit. The concept of idea futures might sound at odds with the world of science, but it has its precedents. Four centuries ago, for Instance, in a "scientific revolutlon," European "outsiders" formed scientific societies where their theories could be judged by how well they agreed with observations, not by how well they agreed with the authorities of the day. Researchers demonstrated their discoveries at society meetings, and patrons sponsored competitions to reward the best solution to a specific problem. [4] Today, a trial idea futures market [5] exists on the Web ( http://if.arc. ab . ca/lF . shtml ), where 1,000 people are testing the possibilities of another path on the scientific quest.
  • ideaMarkets

    1. 1. Talk > University of Lausanne > January 2005 Idea futures markets and technology foresight BFSH1 - 1015 Lausanne - Switzerland - Tel. +41 21 692.3416 - yves.pigneur@unil.ch - http://www.hec.unil.ch/yp Université de Lausanne Ecole des Hautes Etudes Commerciales (HEC) <ul><li>Introduction </li></ul><ul><li>ENVIRONMENT INTELLIGENCE </li></ul><ul><li>scenario </li></ul><ul><li>actor-issue </li></ul><ul><li>multi-criterion </li></ul><ul><li>IDEA FUTURES </li></ul><ul><li>concept </li></ul><ul><li>decision-making </li></ul><ul><li>Examples </li></ul><ul><li>TECHNOLOGY FORESIGHT </li></ul><ul><li>mobile IT </li></ul><ul><li>MICS </li></ul><ul><li>NSF project </li></ul><ul><li>Conclusion </li></ul>Table of content
    2. 2. Agenda <ul><li>ENVIRONMENT INTELLIGENCE </li></ul><ul><ul><li>scenario </li></ul></ul><ul><ul><li>actor-issue </li></ul></ul><ul><ul><li>multi-criterion </li></ul></ul><ul><li>IDEA FUTURES MARKET </li></ul><ul><ul><li>concept </li></ul></ul><ul><ul><li>decision-making </li></ul></ul><ul><ul><li>Examples </li></ul></ul><ul><li>TECHNOLOGY FORESIGHT </li></ul><ul><ul><li>mobile IT </li></ul></ul><ul><ul><li>MICS </li></ul></ul><ul><ul><li>NSF project </li></ul></ul>SCENARIO | IDEA FUTURES | IT FORESIGHT
    3. 3. Assessing a technology environment Observation & capture STUDY Multi-perspective MODEL REPRESENTATION LANDSCAPE Customer Market Future issues Financial aspects Infrastructure Industry ANALYSIS VISUALIZATION > MICS Swiss NSF project]
    4. 4. No prediction … <ul><li>“ This 'telephone' has too many shortcomings to be seriously considered as a means of communication. The device is inherently of no value to us.” [West Union internal memo, 1876] </li></ul><ul><li>“ I have travelled the length and breadth of this country and walked with the best people, and I can assure you that data processing is a fad that won't last out the year.” [The editor of management books at Prentice-Hall, 1957] </li></ul><ul><li>“ There is no reason anyone would want a computer in their home.” [Ken Olsen, President and founder of Digital Equipment Corp., 1977] </li></ul><ul><li>More recently, nobody anticipates the SMS phenomena … </li></ul>SCENARIO | IDEA FUTURES | IT FORESIGHT
    5. 5. But scenarios 1 2 3 A B C D ? Clear-enough future forecast Traditional toolkit Alternate futures Discrete options Game theory Decision analysis True ambiguity No basis for forecast analogies Pattern recognition Range of futures No natural option Scenario planning Levels of uncertainty: WHAT IF …
    6. 6. SCENARIO: Comparison of scenario approaches <ul><li>First comparison of scenarios published by major research groups </li></ul><ul><li>Scenarios for (centralized and self-organized) music distribution </li></ul><ul><li>Scenarios for broadband wireless in China </li></ul>[Debetaz, 2004] Scenarios for m-commerce 2006 (2002) Wireless Foresight in 2015 (2002)
    7. 7. FRAMEWORK: Assessing a technology environment [Bendahan, 2004] [Monzani, 2004] [Camponovo, 2004 uncertain complex disruptive ISSUE ACTOR USE Environment Ontology Analysis Five forces analysis Policy network analysis Structural analysis Actor-issue analysis Disruption analysis Adoption analysis BEST PAPER AWARD JMIS JDS DSS’2004
    8. 8. ASSESSMENT: Disruptive innovation <ul><li>Multi-Criteria Decision Making approach for analyzing disruptions </li></ul>[Ondrus, 2005] Smartcard payment Schemes driven by financial institutions Phone-based payment Schemes operated by mobile operators Independent d payment schemes using cards Independent d payment schemes using a mobile handset Card-based payment solutions Phone-based payment solutions Operator-driven (Finance or MNOs) SELF-ORGANIZED (Newcomers)
    9. 9. Delphi method <ul><li>Formation of a team to undertake and monitor a Delphi on a given subject. </li></ul><ul><li>Selection of one or more panels to participate in the exercise. Customarily, the panelists are experts in the area to be investigated . </li></ul><ul><li>Development of the first round Delphi questionnaire </li></ul><ul><li>Testing the questionnaire for proper wording (e.g., ambiguities, vagueness) </li></ul><ul><li>Transmission of the first questionnaires to the panelists </li></ul><ul><li>Analysis of the first round responses </li></ul><ul><li>Preparation of the second round questionnaires (and possible testing) </li></ul><ul><li>Transmission of the second round questionnaires to the panelists </li></ul><ul><li>Analysis of the second round responses (Steps 7 to 9 are reiterated as long as desired or necessary to achieve stability in the results.) </li></ul><ul><li>Preparation of a report by the analysis team to present the conclusions </li></ul>[ http://www.iit.edu/~it/delphi.html ]
    10. 10. Commodity and financial futures markets <ul><li>A future contract is an agreement to buy or sell an asset at a certain time in the future for a certain price [Hull, 2000] </li></ul><ul><ul><li>Reduce the risks & uncertainties about the future prices & availability </li></ul></ul><ul><ul><li>Chicago Board of Trade (19th century) for commodities, and </li></ul></ul><ul><ul><li>International Monetary Market (1972) for foreign currency </li></ul></ul><ul><ul><li>WHO? </li></ul></ul><ul><ul><ul><li>hedgers, who have an interest in the underlying commodity and are seeking to hedge out the risk of price changes </li></ul></ul></ul><ul><ul><ul><li>speculators, who seek to make a profit by predicting market moves and buying a commodity &quot;on paper&quot; for which they have no practical use. </li></ul></ul></ul><ul><li>Hayek hypothesis </li></ul><ul><ul><li>The price discovery process in a futures market … </li></ul></ul><ul><ul><li>aggregates the market information … </li></ul></ul><ul><ul><li>hold by all the buyers and sellers who can bid or ask for future contract prices </li></ul></ul>[Passmore, 2004] SCENARIO | IDEA FUTURES | IT FORESIGHT
    11. 11. Idea futures and prediction markets <ul><li>Idea of Robin Hanson back to 1988 </li></ul><ul><ul><li>Free-speech right to bet on political question in policy market </li></ul></ul><ul><ul><li>New form of government on idea futures </li></ul></ul><ul><li>People can enter a “claim” in the market </li></ul><ul><ul><li>Proposition or statement that an event will happen by a certain date </li></ul></ul><ul><li>A claim pays off ($1) if the claim becomes true, 0 otherwise </li></ul><ul><ul><li>$1 represents a 1.0 probability </li></ul></ul><ul><ul><li>Cost of a claim is the probability estimated by the market for a claim coming true </li></ul></ul><ul><li>Bettors can thereafter bet FOR or AGAINST a claim </li></ul><ul><li>“ why the many are smarter than the few, and how collective wisdom shapes business, economies, societies, and nations” [Surowiecki, 2004] </li></ul>[Hanson, 1999] http://hanson.gmu.edu/ideafutures.html
    12. 12. Linear market <ul><li>Contracts based on a set of measurable future outcomes V 1 , V 2 , … V m </li></ul><ul><ul><li>Normalized to sum 1 </li></ul></ul><ul><li>Prediction markets designed to forecast these outcomes would have liquidating dividends tied to the normalized outcome values </li></ul><ul><ul><li>Percentage of votes received by candidates in an (two-party) election </li></ul></ul><ul><li>Participants on the market can trade contracts with liquidation values that equal the outcomes </li></ul><ul><li>Contracts paid liquidating dividends of the form: </li></ul><ul><ul><li>CLINTON contract had a liquidating dividend of $1 times the Democratic nominee’s share of the vote </li></ul></ul><ul><ul><li>DOLE contract had a liquidating dividend of $1 times the Republican nominee’s share of the vote </li></ul></ul>[Berg, 2003]
    13. 13. Winner-takes-all market <ul><li>Contracts based on whether a particular event occurred </li></ul><ul><ul><li>A set of possible future outcomes E 1 , E 2 , … E m </li></ul></ul><ul><li>Prediction markets designed to forecast the probabilities of these outcomes would have liquidating dividends tied to the occurrence of each event </li></ul><ul><li>Contracts paid liquidating dividends of the form: </li></ul><ul><ul><li>CLIN contract: $1 if Clinton wins the election, $0 otherwise </li></ul></ul><ul><ul><li>REP contract: $1 if the Republican nominee wins </li></ul></ul><ul><ul><li>OTDEM contract: $1 if a Democratic nominee other than Clinton wins </li></ul></ul><ul><ul><li>ROF96 contract: $1 if any other candidate wins </li></ul></ul><ul><ul><li>P.YES: $1 if Powell placed in nomination at the Republican convention </li></ul></ul><ul><ul><li>P.NO: $1 if Powell not placed in nomination at the Republican convention </li></ul></ul>[Berg, 2003]
    14. 14. Prediction markets as DSS (I) <ul><li>Powell would have been a strong candidate against Clinton </li></ul>[Berg, 2003] illustration
    15. 15. Conditional prediction market <ul><li>Prediction about future events conditional to other events </li></ul><ul><ul><li>A set of measurable future outcomes V 1 , V 2 , … V m </li></ul></ul><ul><ul><li>A second set of possible future outcomes E 1 , E 2 , … E m </li></ul></ul><ul><li>A set of conditional outcomes V i | E j </li></ul><ul><li>Contracts paid liquidating dividends based on the conditional outcomes: </li></ul><ul><ul><li>CL|DOLE: $1 times the Democratic nominee’s vote share conditional on Robert Dole being the Republican nominee </li></ul></ul><ul><ul><li>V.DOLE: $1 times the Republican nominee’s vote share conditional on Robert Dole being the Republican nominee </li></ul></ul>[Berg, 2003]
    16. 16. <ul><li>Dole was predicted to be weak candidate against Clinton </li></ul>Prediction markets as DSS (II) [Berg, 2003] illustration
    17. 17. <ul><li>Small-scale, online future markets </li></ul><ul><ul><li>24H/day continuous double-auction trading mechanism </li></ul></ul><ul><li>Real money </li></ul><ul><ul><li>Min $5 and max $500 </li></ul></ul><ul><ul><li>“ no one spends your money better than you do” </li></ul></ul><ul><ul><li>Profit from trades, but bear the risk of losing money </li></ul></ul><ul><li>Contract on economic and political events </li></ul><ul><ul><li>Elections, companies’ earning per share, stock price return, … </li></ul></ul><ul><li>Research and teaching mission </li></ul><ul><ul><li>University of Iowa Tippie College of Business </li></ul></ul><ul><li>Under the regulatory purview of the Commodity Futures Trading Commission </li></ul><ul><ul><li>No-action letter (if IEM conforms to certain guidelines) </li></ul></ul><ul><li>Better predictor than opinion polls for political elections </li></ul>Iowa Electronic Market (IEM) [Berg, 2002] [Passmore, 2004]
    18. 18. Iowa Electronic Market (IEM) illustration http://www.biz.uiowa.edu/iem/
    19. 19. Iowa Electronic Market (IEM) <ul><li>How do bid & ask prices happen? </li></ul><ul><ul><li>The bid and ask prices on the IEM trading screen are offers to buy and sell posted by traders in the market </li></ul></ul><ul><ul><ul><li>&quot;I bid $.536 per contract for 4 contracts in IBMm, and this bid is good until March 3, 1999, at noon.” </li></ul></ul></ul><ul><ul><ul><li>&quot;I offer to sell 4 contracts in IBMm for $.540 per contract, this order is good until June 5, at 3pm.&quot; </li></ul></ul></ul><ul><li>How do you get contracts to sell? </li></ul><ul><ul><li>Buy a bundle of contracts from the market </li></ul></ul><ul><ul><ul><li>each market has a set of contracts </li></ul></ul></ul><ul><ul><ul><li>only one will pay $1, all others pay 0$ </li></ul></ul></ul><ul><ul><ul><li>keep the contracts that you think will pay off and sell the others </li></ul></ul></ul><ul><ul><li>Buy from another trader </li></ul></ul><ul><li>How do you make money in the IEM markets? </li></ul><ul><ul><li>Buy and hold those contracts which eventually pay $1 </li></ul></ul><ul><ul><li>Buy contracts at a low price and sell them when the prices rise </li></ul></ul><ul><ul><li>Sell one of each contract when sum of all bid prices is greater than $1 (Why?) </li></ul></ul>http://www.biz.uiowa.edu/iem/modules/supdem.html
    20. 20. Foresight Exchange (FX) - ideosphere <ul><li>A betting pool or market on future events and most disputed questions, with the going odds made available, and treated socially as the current consensus </li></ul><ul><ul><li>24H/day continuous double-auction trading mechanism </li></ul></ul><ul><li>A place to check the current odds of upcoming events, trade and make bets. </li></ul><ul><ul><li>not real money: &quot;funny money&quot; (FX-bucks) </li></ul></ul><ul><li>New form of entertainment </li></ul><ul><ul><li>combining the real-time interactive potential of the internet with a game of predictive skill. </li></ul></ul>[Hanson, 1999] [Passmore, 2004] http://www.ideosphere.com/
    21. 21. Foresight Exchange (FX) - ideosphere illustration http://www.ideosphere.com/
    22. 22. <ul><li>Trading on securities corresponding to movies (MOVIESTOCKs) and stars (STARBOND) </li></ul><ul><ul><li>Including those in production and in theaters </li></ul></ul><ul><li>Using fake money </li></ul><ul><ul><li>“ Hollywood Dollars” </li></ul></ul><ul><li>A movie security is liquidated 4 weeks after the release of the movie </li></ul><ul><ul><li>for $1 per $1 million in box office gross </li></ul></ul><ul><li>Entertainment mechanism </li></ul><ul><ul><li>Public interest </li></ul></ul><ul><li>Sophisticated mechanisms </li></ul><ul><ul><li>Reserve & investment banks, leader boards, trading club, tickers, insided trading, funds, options, warrants, “Hollywood Securities and Exchange Commission” </li></ul></ul><ul><li>Accurate predictor </li></ul><ul><ul><li>Week-end revenue of movies, academy awards (35 on 40 Oscar nominees in 2003) </li></ul></ul>Hollywood Stock Exchange (HSE) [Passmore, 2004] [Surowiecki, 2004]
    23. 23. Hollywood Stock Exchange (HSE) illustration http://www.hsx.com/
    24. 24. <ul><li>Gambling forum </li></ul><ul><li>Ireland location </li></ul><ul><ul><li>For evading anti-gambling laws </li></ul></ul><ul><li>Diverse betting topics </li></ul><ul><ul><li>Sports, political, terrorism, … </li></ul></ul><ul><li>Use of market mechanisms to operate the betting system </li></ul><ul><ul><li>Price driven by market transactions, self-organized under market principles </li></ul></ul><ul><ul><li>No handicappers settings the odds for TradeSport bets </li></ul></ul>TradeSports [Passmore, 2004]
    25. 25. TradeSports illustration http://www.tradesports.com 12:48PM GMT, Jan 19
    26. 26. <ul><li>Market-based decision-making </li></ul><ul><ul><li>Claims and completion date </li></ul></ul><ul><ul><li>$100 per contract </li></ul></ul><ul><ul><li>Estimation of 10’000 traders </li></ul></ul><ul><li>Sponsored and cancelled (2003) by the US DoD </li></ul><ul><ul><li>Joint venture with NetExchange ( Caltech spin-off) and The Economist </li></ul></ul><ul><ul><li>Criticized by US politicians “market for death” … </li></ul></ul><ul><li>Allowing defense and intelligence analysts to speculate about strategies and geopolitical issues </li></ul><ul><li>For avoiding surprise and predicting future events </li></ul>Policy Analysis Market (FutureMAP) [Ray, 2004] [Passmore, 2004]
    27. 27. Policy Analysis Market (FutureMAP) illustration http://cryptome.org/pam/pam-site.htm
    28. 28. Policy Analysis Market (FutureMAP) illustration http://cryptome.org/pam/pam-site.htm PAM futures derivatives contracts
    29. 29. Real-Money (TradeSport) Vs play-money (NewsFuture) <ul><li>the play-money markets performed as well as the realmoney markets </li></ul><ul><ul><li>real-money markets may better motivate information discovery </li></ul></ul><ul><ul><li>play-money markets may yield more efficient information aggregation </li></ul></ul>[Servan-Schreiber, 2004] http://us.newsfutures.com/index.html Newsfutures
    30. 30. Predictive markets inside corporations http://blog.commerce.net/archives/2005/01/market_experime.html
    31. 31. Hewlett-Packard IAM Information Aggregation Mechanism <ul><li>Market-based prediction </li></ul><ul><li>Internal corporate idea futures markets </li></ul><ul><ul><li>To predict their sales, and eventually </li></ul></ul><ul><ul><li>the success of their product development projects … </li></ul></ul><ul><li>Participants bought and sold predictions about the future sales of HP printers </li></ul><ul><ul><li>salespeople </li></ul></ul><ul><li>Contracts for each of ten different sales ranges </li></ul><ul><ul><li>Contract: “Sales in September would be between 1501 and 1600 units” </li></ul></ul><ul><ul><li>Claim: buy shares (a kind of future contract for this prediction) </li></ul></ul><ul><ul><li>If true: $1 for each owned share if true </li></ul></ul><ul><li>16 experiments </li></ul><ul><li>Predictions better than the official predictions </li></ul><ul><ul><li>The dispersed salespeople COLLECTIVELY have the information </li></ul></ul><ul><ul><li>Motivation of salespeople </li></ul></ul>[Plott, 2002] [Malone, 2004]
    32. 32. Hewlett-Packard IAM Information Aggregation Mechanism illustration
    33. 33. Securities Trading of Concepts (STOC) <ul><li>Application of the pricing mechanism for marketing research using pseudo-securities markets to measure preferences over new product concepts </li></ul><ul><ul><li>Virtual concept testing (VTC) </li></ul></ul><ul><li>STOC games last between 10 and 60 minutes </li></ul><ul><li>STOC securities can describe actual product concepts or virtual ones </li></ul><ul><li>The incentive is to win a prize in a one-shot, short term game, </li></ul><ul><li>Geared toward predicting preferences </li></ul><ul><ul><li>Double auctions market </li></ul></ul><ul><ul><li>No market-makers </li></ul></ul><ul><ul><li>Transaction when an order matches </li></ul></ul><ul><ul><li>with another on the opposite side </li></ul></ul>[Chan, 2002]
    34. 34. Securities Trading of Concepts (STOC) [Chan, 2002] illustration
    35. 35. Project management @ Siemens <ul><li>experimental stock market, </li></ul><ul><li>designed to support project management decisions. </li></ul><ul><li>People involved in a software development project traded </li></ul><ul><ul><li>in simple real money double auction markets </li></ul></ul><ul><li>Market focused on the date the project should be finished and </li></ul><ul><li>should help to aggregate information on the progress of the project more quickly than conventional management techniques. </li></ul>[Ortner, 1997]
    36. 36. newsbet <ul><li>Speculations about news </li></ul><ul><li>newsbet Dollars </li></ul><ul><ul><li>N$ 1000 at registration and N$ 500 per month </li></ul></ul><ul><li>The prices reflect how much newsbet players have been willing to pay for certain outcomes to come true </li></ul><ul><ul><li>Like the stock market </li></ul></ul><ul><li>Each coupon pays N$1 if its outcome becomes true. </li></ul><ul><li>The more likely you are to win, the more you'll pay for the coupon. </li></ul><ul><ul><li>If an event is very likely, its coupons might be selling for N$0.80; Its opposite for N$0.20 </li></ul></ul><ul><ul><li>If you buy 100 such coupons, you'll pay N$80 to win N$100. </li></ul></ul><ul><ul><li>If you buy 100 opposite coupons, you'll pay N$20 to win N$100. </li></ul></ul>http://www.newsbet.com/
    37. 37. Explanation for successful predictions <ul><li>Markets are efficient at aggregating information </li></ul><ul><ul><li>quickly and largely </li></ul></ul><ul><li>Using the COLLECTIVE WISDOM of knowledgeable people </li></ul><ul><ul><li>including insiders </li></ul></ul><ul><li>Without political pressures and personal agenda </li></ul><ul><ul><li>Anonymously </li></ul></ul><ul><li>BUT </li></ul><ul><li>Information trap, illiquidity, market manipulation, inability to settle on an equilibrium price … </li></ul><ul><ul><li>More research needed! </li></ul></ul>[Ray, 2004] [Sorowiecki, 2004] [Passmore, 2004]
    38. 38. Questions <ul><li>What are the requirements for the group of “traders”? </li></ul><ul><li>How many are needed? </li></ul><ul><li>Need they be experts at securities trading? </li></ul><ul><li>How long do they need to trade to collect useful data? </li></ul><ul><li>How knowledgeable does each participant need to be? </li></ul><ul><li>And what strategy do traders adopt in order to win the game? </li></ul><ul><li>What exactly is being measured by an idea future market? </li></ul><ul><ul><li>Is it an aggregation of diverse, independent opinions or a negotiation process in which participants learn from and are influenced by each other, ultimately achieving consensus? </li></ul></ul><ul><li>What matters most in the market operation? </li></ul><ul><ul><li>the underlying fundamentals of each security, based on some external “truth”, or </li></ul></ul><ul><ul><li>the (potentially biased) perceptions of those truths by the actual traders playing the game? </li></ul></ul><ul><li>How can the data collected during the market operation be best summarized? </li></ul><ul><ul><li>closing prices the ultimate measure of the market consensus, or </li></ul></ul><ul><ul><li>should metrics based on all of the data collected be employed? </li></ul></ul>[Chan, 2002]
    39. 39. Platform for building Idea futures markets http://us.newsfutures.com/home/trader.html PRIZE January 2005
    40. 40. Open source project for building Idea futures markets [Hibbert, 2004] http://labs.commerce.net/wiki/index.php/ZMarket
    41. 41. Seminar on Idea futures markets http://dimacs.rutgers.edu/Workshops/Markets/
    42. 42. Idea futures and scientific forecast <ul><li>“ Idea futures” market for reaching scientific consensus </li></ul><ul><ul><li>Betting pool on disputed science issues </li></ul></ul><ul><ul><li>The current odds are treated as the current intellectual consensus </li></ul></ul><ul><li>Betting odds could serve as a scientific barometer to guide public policy </li></ul><ul><ul><li>Could increase the public’s interest and role in science </li></ul></ul><ul><ul><li>A young researcher proposes a new theory </li></ul></ul><ul><ul><li>Posting a bet on an idea futures market (1-to-3, in favour of her/his theory) </li></ul></ul><ul><ul><li>Academic insider would have to bet against this theory to drive down the odds </li></ul></ul><ul><ul><li>If insider has more money to spend, speculators might take an interest in this theory </li></ul></ul><ul><ul><li>Research patrons or policy makers might decide the question interest them, </li></ul></ul><ul><ul><li>enough to subsidize betting markets on the new theory </li></ul></ul>[Hanson, 1999] http://hanson.gmu.edu/ifwired.html WIRED Issue 3.09 | Sep 1995
    43. 43. IT foresight FOR YOUR EYES ONLY <ul><li>MICS project: </li></ul><ul><li>5 slides missing </li></ul>SCENARIO | IDEA FUTURES | IT FORESIGHT
    44. 44. The end <ul><li>For fun … </li></ul><ul><ul><li>James Surowiecki The Wisdom of Crowds Doubleday, 2004 </li></ul></ul><ul><li>More serious … </li></ul><ul><ul><li>Thomas Malone The future of work HBSP, 2004 </li></ul></ul>http://inforge.unil.ch/yp/TALK/slides/IdeaMarket.pdf SCENARIO | IDEA FUTURES | IT FORESIGHT

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