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Melanie Swan
m@melanieswan.com
@lablogga
July 14, 2014
Slides: http://slideshare.net/LaBlogga
Live Prediction Markets Simu...
1
Prediction Markets
July 14, 2014
Workshop Timeline
 Big Data Quant Methods Introduction 10 min
 GPS for the Mind Exerc...
2
Prediction Markets
July 14, 2014
About Melanie Swan
 Trader, philosopher, futurist, entrepreneur,
founder DIYgenomics, ...
3
Prediction Markets
July 14, 2014
Future Studies & Forecasting Toolkit
 Short term (0-5 yrs):
insight and certainty
 Fo...
4
Prediction Markets
July 14, 2014
GPS for the Mind Exercise
 Plot time orientation: certainty, probability, possibility
...
5
Prediction Markets
July 14, 2014
Big Data Quantitative Indicators
Increasingly complex analysis tools for
every level of...
6
Prediction Markets
July 14, 2014
Tweets per Day: 500m (200 bn/year)
http://www.internetlivestats.com/twitter-statistics/...
Unprecedented Immediacy and
Transmissibility
7
Prediction Markets
July 14, 2014
32.8 m (Mar 2014)
0.8 m (Nov 2012)
Most
Re...
BitCoin: Growth, Volatility, Robocoin ATMs
8
Prediction Markets
July 14, 2014
Source: http://www.coindesk.com/price/, http...
9
Prediction Markets
July 14, 2014
Prediction Markets Definition
Image: http://www.simExchange.com
1Source: Trepte, K. et ...
10
Prediction Markets
July 14, 2014
Markets and Crowd Intelligence
Collective
intelligence
Markets
Prediction
Markets
•Goo...
11
Prediction Markets
July 14, 2014
History of Prediction Markets
 Decision markets, idea futures, information markets,
e...
12
Prediction Markets
July 14, 2014
Prediction Markets – ‘Pricing’ Details
 Price: based on probability of
event occurren...
13
Prediction Markets
July 14, 2014
US Congressional Control for Nov. 2014
Source: https://iemweb.biz.uiowa.edu/graphs/gra...
14
Prediction Markets
July 14, 2014
Anatomy of a Re-Election
Prediction Market: Obama 2012 (July)
Source: http://www.intra...
15
Prediction Markets
July 14, 2014
Real-time Prediction Market: Obama 2012
Source: http://www.intrade.com
Election Day: N...
16
Prediction Markets
July 14, 2014
Bitcoin Prediction Markets
Source: https://www.fairlay.com/
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Prediction Markets
July 14, 2014
Bitcoin Prediction Markets
Source: https://www.fairlay.com/
Bitcoin Prediction Markets...
18
Prediction Markets
July 14, 2014
When to use Prediction Markets
 Complexity (ecosystem)
 Multi-party value chain
 Un...
19
Prediction Markets
July 14, 2014
Types of Prediction Markets
 Enterprise
 Revenue forecasting, demand planning, capit...
20
Prediction Markets
July 14, 2014
Enterprise Prediction Markets
 Aggregate hidden organizational opinion and expertise
...
21
Prediction Markets
July 14, 2014
Consumer Prediction Markets
 Iowa Electronic Markets
 Hollywood Stock Exchange (film...
22
Prediction Markets
July 14, 2014
Friday (170), Saturday (180)
Sunday (185), Monday (200)
23
Prediction Markets
July 14, 2014
HSX: Actor Markets, TV Markets (new)
Source: http://www.hsx.com
 Monetizing the reput...
24
Prediction Markets
July 14, 2014
Gaming Prediction Market - SimExchange
Source: http://www.simexchange.com
SciCast: Science & Tech PMs
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Prediction Markets
July 14, 2014
Source: https://scicast.org
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Prediction Markets
July 14, 2014
Iowa Electronic Health Markets
Source: http://iehm.uiowa.edu/iehm/markets/trnmts/1/lon...
27
Prediction Markets
July 14, 2014
Iowa Electronic Health Markets
Source: http://iehm.uiowa.edu/iehm/trnmt/trnmt.html?sym...
28
Prediction Markets
July 14, 2014
Crowdsourced Data as Prediction Market
Source: http://iehm.uiowa.edu
HealthMap
Google ...
29
Prediction Markets
July 14, 2014
Futurist Prediction Markets – LongBets
Source: http://www.longbets.org/bets
30
Prediction Markets
July 14, 2014
Futurist Prediction Markets – LongBets
Source: http://www.longbets.org/bets
31
Prediction Markets
July 14, 2014
Prediction Market Design
 Structure
 Event outcome (win/loss)
 Market scoring (cont...
32
Prediction Markets
July 14, 2014
Future of Prediction Markets
 Public Prediction Markets
 Opinion capture as a standa...
33
Prediction Markets
July 14, 2014
Broader Context: Markets are the Platform
Types of Markets Resource
allocation
Exchang...
34
Prediction Markets
July 14, 2014
Resources
 #PredictionMarkets
 @CassSunstein, @JustinWolfers
 http://www.midasoracl...
35
Prediction Markets
July 14, 2014
Prediction Markets Summary
Image: http://www.simExchange.com
 Prediction markets are ...
Questions?
Melanie Swan
Principal
MS Futures Group
+1-650-681-9482
m@melanieswan.com
www.melanieswan.com
Slides: http://sl...
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Singularity University Live Prediction Markets Simulation & Big Data Quantitative Indicators

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Singularity University Live Prediction Markets Workshop & Big Data Quantitative Indicators: Creating the future means being able to understand and operate within multiple areas of rapidly changing technology. We need to know how to harness the many digital tools and indicators at our disposal. Market principles are being deployed on a larger scale in novel ways to rethink traditional institutions and allow unprecedented global-scale collaboration, communication, remuneration, and real-time information flow through prediction markets, cyber-currencies (Bitcoin, etc.), and eLabor marketplaces.

Published in: Technology, Economy & Finance

Transcript of "Singularity University Live Prediction Markets Simulation & Big Data Quantitative Indicators"

  1. 1. Melanie Swan m@melanieswan.com @lablogga July 14, 2014 Slides: http://slideshare.net/LaBlogga Live Prediction Markets Simulation Big Data Indicators Image: http://wall.alphacoders.com/ SU GPS for the Mind: www.mindtimemaps.com/start/sugp1 SU Prediction Market: gsp14.inklingmarkets.com
  2. 2. 1 Prediction Markets July 14, 2014 Workshop Timeline  Big Data Quant Methods Introduction 10 min  GPS for the Mind Exercise 5 min  Prediction Markets Overview 25 min  Estimation Exercise 10 min  Live Prediction Markets Workshop 60 min
  3. 3. 2 Prediction Markets July 14, 2014 About Melanie Swan  Trader, philosopher, futurist, entrepreneur, founder DIYgenomics, writer  Education: MBA Finance, Wharton; BA French/Economics, Georgetown University; Kingston University London, Paris Univ 8  Work experience: Fidelity, JP Morgan, Arthur Andersen, iPass, RHK/Ovum  Current projects: melanieswan.com  Sample publications  Swan, M. The Quantified Self: Fundamental Disruption in Big Data Science and Biological Discovery. Big Data 2014.  Swan, M. Crowdsourced Health Research Studies: An Important Emerging Complement to Clinical Trials in the Public Health Research Ecosystem. J Med Internet Res 2012, Mar;14(2):e46.  Swan, M. Multigenic Condition Risk Assessment in Direct-to-Consumer Genomic Services. Genet. Med. 2010, May;12(5):279-88.  Swan, M. Translational antiaging research. Rejuvenation Res. 2010, Feb;13(1):115-7.  Swan, M. Engineering Life into Technology: the Application of Complexity Theory to a Potential Phase Transition of Intelligence. Symmetry 2010, 2, 150:183. Source: http://melanieswan.com/publications.htm
  4. 4. 3 Prediction Markets July 14, 2014 Future Studies & Forecasting Toolkit  Short term (0-5 yrs): insight and certainty  Forecasting  Scanning  Business intelligence  Trend analysis  Market research  Time orientation  Outlier identification  Technology checklist  Long term (5-20+ yrs): uncertainty, discontinuity  Scenario planning  Simulation  Frameworks  Wild-carding  Longitudinal studies  Multiple time frames  Prediction markets Image: Bill Frymire
  5. 5. 4 Prediction Markets July 14, 2014 GPS for the Mind Exercise  Plot time orientation: certainty, probability, possibility www.mindtimemaps.com/start/sugp1 Image: http://www.mindtime.com Source: Fortunato, VJ and Furey, JT. The theory of MindTime: The relationships between Future, Past, and Present thinking and psychological well-being and distress. Personality and Individual Differences. January 2011, 50(1), pp. 20-4. http://www.miindtime.com certainty possibility probability
  6. 6. 5 Prediction Markets July 14, 2014 Big Data Quantitative Indicators Increasingly complex analysis tools for every level of Internet-based activity Social Networks, Email, Photo-Sharing, Info-Sharing # people ww online, # phones/smartphones, #IoT # daily tweets, hourly YouTube volume, eBook sales MOOCs (Kahn Academy, Coursera, etc.) Bitcoin (cybercurrencies) eLabor Marketplaces, Ideas/IP Markets, Health Social Networks, Quantified Self Problem-solving Communities (eteRNA, FOLDit, Kaggle) Influence, Attention, Inention Measurement: Twitter, Klout, Peer Index, ThinkUp
  7. 7. 6 Prediction Markets July 14, 2014 Tweets per Day: 500m (200 bn/year) http://www.internetlivestats.com/twitter-statistics/ (4 pm)
  8. 8. Unprecedented Immediacy and Transmissibility 7 Prediction Markets July 14, 2014 32.8 m (Mar 2014) 0.8 m (Nov 2012) Most Retweets
  9. 9. BitCoin: Growth, Volatility, Robocoin ATMs 8 Prediction Markets July 14, 2014 Source: http://www.coindesk.com/price/, http://bitcoinatmmap.com “Bitcoin could become the first trillion dollar non-fiat currency” Bitcoin is an open-source protocol enabling the transmission of value across the Internet in the form of a digital asset, digital currency, or payment mechanism; ia decentralized peer-to-peer monetary system
  10. 10. 9 Prediction Markets July 14, 2014 Prediction Markets Definition Image: http://www.simExchange.com 1Source: Trepte, K. et al. Forecasting consumer products using prediction markets. MIT. 2009. http://dspace.mit.edu/handle/1721.1/53546  Prediction Markets are a tool for collecting group opinion using market principles • Lots of sharable hidden information • Prediction markets may beat polls/experts in accuracy1
  11. 11. 10 Prediction Markets July 14, 2014 Markets and Crowd Intelligence Collective intelligence Markets Prediction Markets •Google+ •Question networks (Quora, formspring) •Crowdsourced labor marketplaces •Competitions (Kaggle, foldIT, eteRNA) •Wikipedia, Twitter •Health Social Networks •DIYscience http://www.cs.cornell.edu/home/kleinber/networks-book •Crowdfunding (Kickstarter, Indiegogo) •Resource allocation (Airbnb, Uber, Gettaround) •Group purchasing (Groupon) •Reverse group purchasing (Loopt u- deals, Ringleadr) •Affinity capital •P2P lending •Gift economy
  12. 12. 11 Prediction Markets July 14, 2014 History of Prediction Markets  Decision markets, idea futures, information markets, event derivatives, virtual markets  Long history of betting on events  Election betting, sports betting, stock markets  Modern incarnation – last ~20 years  1988 Iowa Electronic Markets first market1  2002 US DARPA terrorism futures debacle  Main forms: enterprise and consumer prediction markets  Testbed for financial contracts  Housing and weather futures, carbon trading, movie futures  Futarchy  Notion of using prediction markets in government policy 1Source: http://www.midasoracle.org/2007/07/17/history-prediction-markets-timeline Image: http://www.bookshift.com
  13. 13. 12 Prediction Markets July 14, 2014 Prediction Markets – ‘Pricing’ Details  Price: based on probability of event occurrence  Value: leading indicator, expose hidden information  Pay-off: monetary, reputational, indirect  Accuracy: better than conventional forecasting1 1Source: Arrow, K.J. et al “The Promise of Prediction Markets” Science, 2008, 320, 5878, 877-878 http://www.sciencemag.org/cgi/content/summary/320/5878/877 Iowa Electronic Markets: 2008 US Democratic Convention Market Clinton Obama Image: http://upload.wikimedia.org/wikipedia/commons/1/13/IEM_DCON2008.svg  Tool for collecting and aggregating opinion using market principles
  14. 14. 13 Prediction Markets July 14, 2014 US Congressional Control for Nov. 2014 Source: https://iemweb.biz.uiowa.edu/graphs/graph_Congress14.cfm
  15. 15. 14 Prediction Markets July 14, 2014 Anatomy of a Re-Election Prediction Market: Obama 2012 (July) Source: http://www.intrade.com Blip: May 1, 2011, Osama bin Laden killed
  16. 16. 15 Prediction Markets July 14, 2014 Real-time Prediction Market: Obama 2012 Source: http://www.intrade.com Election Day: November 7, 2014 – 4 pm EST Election Day: November 7, 2014 – 10 pm EST
  17. 17. 16 Prediction Markets July 14, 2014 Bitcoin Prediction Markets Source: https://www.fairlay.com/
  18. 18. 17 Prediction Markets July 14, 2014 Bitcoin Prediction Markets Source: https://www.fairlay.com/ Bitcoin Prediction Markets White Paper available on Github: https://github.com/psztorc/Truthcoin/tree/master/docs  Predictious, Fairlay, Bitcoin Bull Bear
  19. 19. 18 Prediction Markets July 14, 2014 When to use Prediction Markets  Complexity (ecosystem)  Multi-party value chain  Uncertainty  Clear outcomes  Market liquidity  Diversity of opinion Prediction Markets books
  20. 20. 19 Prediction Markets July 14, 2014 Types of Prediction Markets  Enterprise  Revenue forecasting, demand planning, capital budgeting  Innovation life cycle management (rate, filter, prioritize ideas)  Project management, risk management  Consumer  Event prediction (politics: election results; economics: box office receipts, product sales; health: pandemic prediction)  Surfacing relevant content (information valuation) Source: http://www.hsx.com
  21. 21. 20 Prediction Markets July 14, 2014 Enterprise Prediction Markets  Aggregate hidden organizational opinion and expertise  PMs in use at 100-200 US organizations (June 2014)  Ex: Paypal, HP, BestBuy, Electronic Arts, Boeing, Amazon, Harvard, GM, Hallmark, P&G, Ford, Microsoft, Chevron, Lockheed Martin, CNN, Adobe, American Express, Bosch  Prediction market vendors (enterprise idea management)  Consensus Point, Inkling, Spigit/Crowdcast, Bright Idea, Qmarkets  Crowdsourcing and creative concepts market vendors  Chaordix, Jovoto Image: http://torontopm.files.wordpress.com/2009/06/quarterly-sales-graph.jpg?w=300&h=234
  22. 22. 21 Prediction Markets July 14, 2014 Consumer Prediction Markets  Iowa Electronic Markets  Hollywood Stock Exchange (film)  simExchange (gaming)  CROWDPARK (general)  LongBets (futurist) Source: http://www.hsx.com Release Date
  23. 23. 22 Prediction Markets July 14, 2014 Friday (170), Saturday (180) Sunday (185), Monday (200)
  24. 24. 23 Prediction Markets July 14, 2014 HSX: Actor Markets, TV Markets (new) Source: http://www.hsx.com  Monetizing the reputation economy: likes, ideas, attention, intention
  25. 25. 24 Prediction Markets July 14, 2014 Gaming Prediction Market - SimExchange Source: http://www.simexchange.com
  26. 26. SciCast: Science & Tech PMs 25 Prediction Markets July 14, 2014 Source: https://scicast.org
  27. 27. 26 Prediction Markets July 14, 2014 Iowa Electronic Health Markets Source: http://iehm.uiowa.edu/iehm/markets/trnmts/1/london_cholera
  28. 28. 27 Prediction Markets July 14, 2014 Iowa Electronic Health Markets Source: http://iehm.uiowa.edu/iehm/trnmt/trnmt.html?symbol=dengue  Flu markets  Disease markets
  29. 29. 28 Prediction Markets July 14, 2014 Crowdsourced Data as Prediction Market Source: http://iehm.uiowa.edu HealthMap Google Flu Trends
  30. 30. 29 Prediction Markets July 14, 2014 Futurist Prediction Markets – LongBets Source: http://www.longbets.org/bets
  31. 31. 30 Prediction Markets July 14, 2014 Futurist Prediction Markets – LongBets Source: http://www.longbets.org/bets
  32. 32. 31 Prediction Markets July 14, 2014 Prediction Market Design  Structure  Event outcome (win/loss)  Market scoring (continuum)  Time frame  Episodic or continuous  Participants  Anonymous users  Participation incentive  Question design:  (the question) What is your opinion?  (the feedback loop) Rate your certainty. What do you think others will say? How accurately will others answer?  Calibration round(s) Image: http://www.consensuspoint.com
  33. 33. 32 Prediction Markets July 14, 2014 Future of Prediction Markets  Public Prediction Markets  Opinion capture as a standard feature  Activity Chiclets: Like, Vote Up/Down, +1, tweet, share, comment, bookmark, opine  Quality, Valence, Value/Interesting-ness  Two-way XML element  Ubiquitous real-time polling  Automatic markets per interest profile  Enterprise Prediction Markets & Information Modulation  BOL / ERP / supply chain integration  Sales and CRM integration  Reputation: knowledge acuity ratings of individuals become a valuable and personally-tradable currency  Accurate predictor, information steward Image:http://www.tvrage.com/shows/id-23464
  34. 34. 33 Prediction Markets July 14, 2014 Broader Context: Markets are the Platform Types of Markets Resource allocation Exchange: supply & demand meet Information (price) discovery Value identification & attribution Utility creation Traditional Markets      Prediction Markets    Affinity Capital    Multicurrency Society   Automatic Markets   Idea Management Marketplaces  Scarcity Management / Abundance Injection (PSE)    Roles of Markets Source: Swan, M. New Banks, New Currencies and New Markets in a Multicurrency World: Roadmap for a Post-Scarcity Economy by 2050, presented at Create Futures IberoAmérica, Enthusiasmo Cultural, São Paolo Brazil, October 14, 2009. http://melanieswan.com/documents/economy_20.pdf Economy2.0
  35. 35. 34 Prediction Markets July 14, 2014 Resources  #PredictionMarkets  @CassSunstein, @JustinWolfers  http://www.midasoracle.org  http://www.ingenesist.com  http://torontopm.wordpress.com  Prediction Market Industry Association  http://www.pmindustry.org  Relevant Papers  Prelec D. A Bayesian truth serum for subjective data. Science. 2004 Oct 15;306(5695):462-6.  Trepte, K. et al. Forecasting consumer products using prediction markets. MIT. 2009. http://dspace.mit.edu/handle/1721.1/53546  Chang, W. et al. Simulating prediction markets that include human and automated agents. MIT. 2009. http://dspace.mit.edu/handle/1721.1/53097
  36. 36. 35 Prediction Markets July 14, 2014 Prediction Markets Summary Image: http://www.simExchange.com  Prediction markets are a tool for collecting group opinion using market principles
  37. 37. Questions? Melanie Swan Principal MS Futures Group +1-650-681-9482 m@melanieswan.com www.melanieswan.com Slides: http://slideshare.net/LaBlogga Image: http://wall.alphacoders.com/ DIAMANDIS KURZWEIL Well, Ray, we’re still waiting for the jet pack Futurism 2050 DIAMANDIS KURZWEIL Well, Ray, we’re still waiting for the jet pack Futurism 2050 SU GPS for the Mind: www.mindtimemaps.com/start/sugp1 SU Prediction Market: gsp14.inklingmarkets.com “Courage consists in agreeing to flee rather than live tranquilly and hypocritically in false refuges” ― Gilles Deleuze, Anti-Oedipus: Capitalism and Schizophrenia
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