This workshop reminded me of the early conferences in quantum computing a decade ago. Quantum computing back then had some promising research (factoring algorithms for example) and no one was sure whether it would lead to whole new computing paradigm or just disappear into the ether. Information markets are also a new technology with some promising research (mostly analytic and experimental) and no one knows whether it will revolutionize the way everyone does prediction, information aggregation and decision making or just slowly disappear.
Information markets face different challenges than quantum computing. The technology already exists to run efficient markets and better tools are being developed. However the field needs to convince business and governmental leaders of the value and accuracy of the markets, overcome the stigma from the terrorism futures scare and find ways to overcome the legal issues relating to gambling in running real money markets.
Quantum computing needs to deal merely with the laws of physics but information markets need to deal with the laws of the United States of America.
Update 2/9: Ken Kittlitz's report on the workshop. (Thanks to Chris Masse)
So, did the information markets predict the Super Bowl winner correctly?
ReplyDelete(It seems the more popular betting events can create speculative bubbles, where people root for their team rather than actually providing real information. Is this a major problem in information markets?)
I'd agree that people having different beliefs (or hopes) would, and does lead to inconsistencies. For example the ongoing odds for a major sporting event are often quite different in different parts of the world. (Of course the difference is smaller than the ~8.5% commission)
ReplyDeleteThus either the classical assumption "The market acts on all the information available to it" (going back to Bachelier, 1900, if not earlier) is invalid or the world is still not as small as we like to believe. Or both.