Prediction markets

My good friend Adam Siegel and Inkling Markets gets a major shoutout from Harvard Business: How to Kill Bad Projects

The problem of corrupted information flows stayed with Siegel and ultimately led him to found his current company, Inkling Markets, a software-as-service venture aimed at helping companies conduct successful prediction markets. What does a prediction market have to do with eliminating spin? Siegel sees an opportunity to produce higher quality decision support in businesses by tapping anonymous input “from people who aren’t normally asked their opinions, in samples large enough to filter out individual agendas.”

Prediction markets are a great way to include voices in the conversation that aren't normally at the table, while at the same time avoiding the problems of groupthink.

Giving thanks to Steve Ballmer

I made a killing in an Inkling prediction market this past weekend when the MicroHoo talks went down the tubes: Will Microsoft announce a successful buyout of Yahoo! in 2008?. I started shorting the deal last week at $84, and just kept buying all the way down.

I have no idea how the corporate world works, and how you are supposed to consummate these sorts of deals. For all I know it's against the law to talk to the buy-out target before the fact. Regardless, I think the whole notion is stupid. Think how much better this would have gone in a transparent world? Where Steve sends Jerry an email, or even better-- a tweet, and says, "Can we talk? I want to share an idea we've had with you." Then they get together over a beer, "discover" that they have pretty different cultures, that there are significant barriers, and that maybe it wasn't such a good idea after all.

Maybe things just aren't done that way in business-- how would I know? We don't deal in numbers that big in academia. I do know that a little transparency might have led to a whole lot more trust, and if the deal couldn't be made at least they wouldn't be facing such a brutal and very public failure.

Regardless, their failure catapulted me into the top 100 traders at Inkling, and on to the leader-board for the week. And for that I am thankful!

My new Barack Obama Inkling market

I started a new Inkling market: Will Barack Obama go bowling again before November 4, 2008? It addresses a serious question, will he let his image as a bowling klutz stand, or might he take some midnight lessons with some bowling guru, e.g. Earl Anthony (if he was still alive), and take another run at it?

I'm of a mind that Mr. Obama will not want that bowling video to run over-and-over-and-over like some previous tank footage... I think the best way for him to erase that video from the publics mind is to get back on the horse, and to knock down some pins. We know he is athletic, and I'm thinking he could make rapid improvements in his game with a little practice.

If I was allowed to invest in a market I'd created I'd be going long. Get yourself over to Inkling and make an investment...

Inkling Tour de France prediction market

Wooo hoooo, the Tour de France starts tomorrow morning. If we believe the wisdom of crowds my Inkling Tour de France prediction market has Russian cyclist Alexandre Vinokourov as the pre-race favorite.

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It's not too late to dive into the market. Looking at my Web stats from today I was pleasantly surprised at the number of click-throughs to the Inkling site. It's more click-throughs than I've ever seen by a bunch. What a difference a year makes. Last year I was begging people to participate. This year we've got a vibrant and active market. Be sure and jump into the game. It's fun and free.

UPDATE: just hours before the start Vinokourov is up to 37%.

Inkling Tour de France prediction market

My Tour de France prediction market is open for business at Inkling Markets: Who will win the 2007 Tour de France? It's fun and it's free so get your butts over to Inkling and invest in some cyclists! There's a huge advantage to getting in early.

American Idol follow-up

Bill Tancer at Hitwise Intelligence has an update on the Google search traffic that lead to his incorrect predicton that Blake Lewis would win American Idol.

As I wrote in last week's TIME column, predicting American Idol results based on search term data is not an easy feat, really more art than science. Last week based on search terms for the week ending 5/19/07, Blake Lewis led Jordin Sparks in overall search term volume, the basis for my prediction that Blake would win. The biggest challenge in making an idol prediction using search term data is that you can't factor the last performance and vote (on Tuesday evening, our search term data is weekly and updates on Monday for the previous Saturday).

What a crock. If if you use that logic then you would conclude that you should never predict anything based on search traffic. As you will remember, I decided to go with his prediction and invested my hard earned inkles on Blake to win. I lost $650 in the process. Next time I will stick with the wisdom of the crowd.

Who will win American Idol?

Who will it be Jordin Sparks or Blake Lewis? If you look at Inkling Markets it looks to be Jordin in a cake-walk.

But, Hitwise Intelligence has a different take: Blake Lewis Leading in Search Terms

So who do you go with? I have to admit that I have been partial to Jordin from the get-go. She is incredibly talented. I didn't, however, put down any inkles early in the competition. So if I'm investing today there's no way I put down $94 for the opportunity to earn $6. I'm going to go with the person that Google tells us has the public's interest. I'm investing $200 on Blake to win it all. This could be an incredible return on investment if the crowds are wrong.