This document discusses different types of collective decision making systems, including dynamically distributed democracy and prediction markets. Dynamically distributed democracy allows inactive participants to delegate their voting power to active participants based on a trust network. Prediction markets use trading of contracts to aggregate predictions from a group about future events. Both systems aim to leverage the wisdom of crowds by incorporating more perspectives than could participate at once. Real-world examples show these systems can outperform traditional polling methods.

1. Distributed Collective Decision Making: From Ballot to Market Marko A. Rodriguez (1) Jennifer H. Watkins (2) (1) Digital Library Research & Prototyping Team (2) Socio-Political Dynamics Team Los Alamos National Laboratory (1) [email_address] (2) [email_address] http://cdms.lanl.gov Discovery Workshop: Applying Complexity Science to Organizational Design and Multistakeholder Systems

2. Overview Collective Decision Making Systems Dynamically Distributed Democracy Prediction Markets Conclusion

3. Overview Collective Decision Making Systems Dynamically Distributed Democracy Prediction Markets Conclusion

6. Taxonomy of Collective Decision Making Systems

7. Overview Collective Decision Making Systems Dynamically Distributed Democracy Prediction Markets Conclusion

11. Dynamically Distributed Democracy. 1 1 1 1

12. Dynamically Distributed Democracy. 1.75 1.25 1

13. Dynamically Distributed Democracy. 2.5 1.5

18. Overview Collective Decision Making Systems Dynamically Distributed Democracy Prediction Markets Conclusion

21. A Prediction Market. Human A Y = 100% N = 0% Human B Y = 70% N = 30% Human C Y = 45% N = 55% $2.00 $2.00 $2.00 Bids Asks Y = $null N = $null $0.00 “ Will X happen? Y es or N o.”

22. A Prediction Market. Human A Y = 100% N = 0% Human B Y = 70% N = 30% Human C Y = 45% N = 55% Y N Y N Y N $1.00 $1.00 $1.00 Bids Asks Y = $0.50 N = $0.50 $3.00

23. A Prediction Market. Human A Y = 100% N = 0% Human B Y = 70% N = 30% Human C Y = 45% N = 55% Y N Y N Y N $1.00 $1.00 $1.00 Bids Asks Y = $0.50 N = $0.50 $3.00 Human A: “Buying Y for $0.60” Human B: “Buying Y for $0.70”

24. A Prediction Market. Human A Y = 100% N = 0% Human B Y = 70% N = 30% Human C Y = 45% N = 55% Y N Y N Y N $1.00 $1.00 $1.00 Bids Asks Y = $0.50 N = $0.50 $3.00 Human A: “Buying Y for $0.60” Human B: “Buying Y for $0.70” Human C: “Selling Y for $0.70”

25. A Prediction Market. Y Human A Y = 100% N = 0% Human B Y = 70% N = 30% Human C Y = 45% N = 55% Y N Y N N $1.00 $0.30 $1.70 Bids Asks Y = $0.70 N = $0.50 $3.00 Human A: “Buying Y for $0.60”

26. A Prediction Market. Y Human A Y = 100% N = 0% Human B Y = 70% N = 30% Human C Y = 45% N = 55% Y N Y N N $1.00 $0.30 $1.70 Bids Asks Y = $0.58 N = $0.42 $3.00 Human A: “Buying Y for $0.60”

27. A Prediction Market. Y Human A Y = 100% N = 0% Human B Y = 70% N = 30% Human C Y = 45% N = 55% Y N Y N N $1.00 $0.30 $1.70 Bids Asks Y = $0.58 N = $0.42 $3.00 Human A: “Buying Y for $0.90” Human C: “Buying N for $0.45”

28. A Prediction Market. Human A Y = 100% N = 0% Human B Y = 70% N = 30% Human C Y = 45% N = 55% Y N Y N $1.00 $0.30 $1.70 Bids Asks Y = $0.58 N = $0.42 $3.00 Human A: “Buying Y for $0.90” Human C: “Buying N for $0.45” Y Human B: “Selling Y for $0.90” N Human B: “Selling N for $0.45”

29. A Prediction Market. Y N Human A Y = 100% N = 0% Human B Y = 70% N = 30% Human C Y = 45% N = 55% Y N Y N $0.10 $1.65 $1.25 Bids Asks Y = $0.90 N = $0.45 $3.00

30. A Prediction Market. Y N Human A Y = 100% N = 0% Human B Y = 70% N = 30% Human C Y = 45% N = 55% Y N Y N $0.10 $1.65 $1.25 Bids Asks Y = $0.66 N = $0.33 $3.00

31. A Prediction Market. Y N Human A Y = 100% N = 0% Human B Y = 70% N = 30% Human C Y = 45% N = 55% Y N Y N $0.10 $1.65 $1.25 Bids Asks Y = $0.66 N = $0.33 $3.00

32. A Prediction Market. N Human A Y = 100% N = 0% Human B Y = 70% N = 30% Human C Y = 45% N = 55% N N $2.10 $2.65 $1.25 Bids Asks Y = $0.66 N = $0.33 $0.00

34. Overview Collective Decision Making Systems Dynamically Distributed Democracy Prediction Markets Conclusion

36. Questions? http:// c d m s .lanl.gov [email_address] [email_address]