Online Collective Intelligence

15.993 Report The Future of Collective Intelligence Garrett Dodge April 9, 2007 www.gdodge.blogspot.com

What’s Driving Web 2.0? CUSTOMIZATION COLLECTIVE INTELLIGENCE COMMUNITY

Market Trend: Collective Intelligence
Intelligence of aggregate community vs. the individual
Information-sharing by individuals
Low cost creation of content by users
Increased access to user’s knowledge
Incentives for sharing (social recognition or monetary reward)
Low-cost for large amounts of data
Self-policing within well-designed constraints
Information constantly updating
Constant customer feedback
Easily accessible consumer data
Innovative content creation
Law of averages creates greater accuracy
Necessary to filter contributions of all users (negative network effects)
Intellectual Property is a concern since open forum
Critical mass of users necessary to achieve results and draw other users
Gaming by users undermines trust
Potential for exploitation
Drivers Constraints Features

Community: Competition Source: Company websites, Literature Search
Concept: Users build teams of players from a given sport and compete in leagues based on player statistics
Features:
Competition promotes high engagement level on site
Targets young, male demographic
Data-driven management
Users pay for live updates
Similar Site: Motley Fool CAPS, Trade Sports, PicksPal
fantasysports.yahoo.com

Markets: News & Events Source: Company websites, Literature Search
Concept: Users bid on the likelihood of events in sports, politics, and financial markets
Features:
Large number of registered users but small number of active users
Inkling offers market creation platform
Sample questions: Will Barack Obama be the Democratic nominee?; Will avian flu reach the US?
Similar Site: Inkling Markets, PicksPop (pop culture)
us.newsfutures.com

CI: Knowledge of the Masses
Concept: Users compete by managing virtual portfolios
Features
Top investors aggregate into index
Premium members get stock alerts, weekly insight, daily stock info
Only members in top 25% for six months can post in forums
Option to create clubs with friends, family, etc.
Similar sites: Iowa Electronic Exchange, Wikinancial
www.marketocracy.com Source: Company websites, Literature Search “ What better form of collective intelligence is there than a market.” - CISR Research Scientist

Community: Information Sharing
Concept: Users post estimates of their net worth
Features
Comparison of financial information by age, profession, etc.
Blogs on personal finance decisions
Openness of users in sharing financial data
Similar sites: Wesabe, Foonance, DimeWise, Bullpoo
www.networthiq.com Source: Company websites, Literature Search

CI: Product Development www.threadless.com
Concept: Product development instance for a community-centered T-shirt store
Features:
Publishing of T-shirt designs online, which are put to a public vote
Product development tool: only T-shirts with highest votes are printed
Rewarding publishers of relevant content for the community
Over 300,000 users

CI: Content
Concepts: User contributed articles
Features
Broad range of topics
Multiple points of view, 5,000 participating writers
Greater visibility than blogs
Financial reward for quality content
Similar Sites: We Are Smarter, Tax Almanac, A Million Penguins
www.helium.com Source: Company websites, Literature Search

Implementing CI
Can predictive markets work without information transparency?
How do we prevent users from gaming the system?
PicksPal has been beating the Vegas odds. Is this sustainable? Why or Why not?
What size community do we need to achieve results? PicksPal is currently successful with 100,000 members.
“ PicksPal is a fascinating human experiment in predictive markets. The people making the picks (the elite users) don’t know they are doing it - they are simply making bets with their friends for bragging rights. If they did know that their picks were being used as part of an average to give advice to actual Vegas betters, they may choose games differently. Perhaps they would be more conservative, for example. If PicksPal’s win rate over the long run remains over 50% against the spread, they will begin to disrupt the betting markets.” TechCrunch

Appendix Garrett Dodge April 9, 2007

Selected Quotations Customization Community Collective Intelligence “ What better form of collective intelligence is there than a market.” - CISR Research Scientist “ In my communities research I have found that there are several types of communities cropping up online, customer service, product innovation, market research, and communities for commerce.” - hstrout, We Are Smarter “ It is also a very natural and healthy dynamic for a community to have many more 'readers' than people participating in the conversation or in the creation of media. You will find that this is the case in most communities online.” - Yaronb, We Are Smarter “ Widgets that have office functionality—and their inclusion on Intranet dashboards—is probably where Google, Microsoft and the smaller players like Pageflakes and Netvibes are heading.” - Richard MacManus, Tales from the Web 2.0 Frontier

References
“ Results from a Dozen Years of Election Futures Markets Research” by Joyce Berg, Robert Forsythe, Forrest Nelson, Thomas Rietz; College of Business Administration University of Iowa, November 2000
“ Structure and Evolution of Online Social Networks” by Ravi Kumar, Jasmine Novak, Andrew Tomkins; Yahoo! Research, June 2006
“ The Challenge of ‘Customerization’ in Financial Services” by Jerry Wind; Journal of Interactive Marketing, Winter 2001
“ Friendster and Publicly Articulated Social Networking” by Danah Michele Boyd: CHI 2004
“ Searching Social Networks” by Bin Yu & Munindar Singh; AAMAS July 2003
“ HT06, Tagging Paper, Taxonomy, Flickr, Academic Article, To Read” by Cameron Marlow & Danah Boyd August 2006

Online Collective Intelligence

by Garrett Dodge on Apr 18, 2007

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