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.
How AI, OpenAI, and ChatGPT impact business and software.
Singularity University Live Prediction Markets Simulation & Big Data Quantitative Indicators
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. 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
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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
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Prediction Markets
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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
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Prediction Markets
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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
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Prediction Markets
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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
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Prediction Markets
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Tweets per Day: 500m (200 bn/year)
http://www.internetlivestats.com/twitter-statistics/
(4 pm)
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
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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
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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
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Prediction Markets
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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
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Prediction Markets
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US Congressional Control for Nov. 2014
Source: https://iemweb.biz.uiowa.edu/graphs/graph_Congress14.cfm
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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
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Prediction Markets
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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
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Prediction Markets
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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
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Prediction Markets
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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
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Prediction Markets
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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
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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
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Prediction Markets
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Prediction Markets Summary
Image: http://www.simExchange.com
Prediction markets are a tool for collecting group
opinion using market principles
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