9/24/2007

Virtual Prediction Markets in a Web 2.0 world...

Yahoo has recently launched a high-tech prediction market online, which allots each participant $10,000 to start (play-money) and provides shares many of the most popular technologies. Below you will find my portfolio, which I could have put more thought into, but it largely reflects my personal view of how the emerging technology marketplace will play itself out.

I am a BIG Google and Firefox fan, as I see the future of the internet to be in the blending of the browser with the web service, a la Firefox extensions like the Google Toolbar. I am also a huge fan of open source software, Debian being my preferred Linux distribution. My personal laptop is a MacBook, and I eagerly anticipate the release of Leopard, Steve Jobs' new OS to compete with Microsoft's Vista. Recently I have tried to start buying shares in technologies that I don't have extensive experience with but have a general understanding of its purpose and capabilities. Since starting my account at the beginning of July, I have made a $3,300 profit. The following is my portfolio as of 9/24.
My Portfolio
Stock Market Qty Current Price Average Cost Unrealized Profit/Loss ROI
MAPAPI APICAT 23 $20.82 $20.92 $-2.27 -0.47%
MOZFF BROWSER2 131 $16.88 $15.42 $191.67 9.49%
YDESK DESKSEARCH2 52 $11.23 $11.06 $8.62 1.50%
GTALK IM2 366 $6.78 $6.64 $36.14 1.49%
NETBEANS JAVAIDE2 48 $18.80 $16.64 $103.47 12.96%
MACLPD MACVMIC 246 $4.77 $4.81 $-10.78 -0.91%
PANDORA ONLNMUSIC2 201 $9.41 $9.07 $65.30 3.58%
DELICIOUS SOCBKMARKS2 104 $13.60 $13.36 $23.27 1.67%
JOTSPOT WIKI2 19 $9.77 $10.15 $-7.33 -3.80%
FACEBK YASN 101 $8.29 $7.86 $42.87 5.40%
CLINTON DEMPRIMARY 372 $0.54 $0.54 $-0.03 -0.01%
GIULIANI REPPRIMARY 2409 $0.33 $0.33 $0.00 0.00%
$450.94 3.56%

You will notice that my final two holdings are Clinton and Giuliani, which I bought just this evening. Yahoo added markets for the 2008 presidential candidates on 9/16 and so far neither of my investments have reached the top of their party's market. Fred Thompson is at the top of the Republican field, getting 0.47 a share followed by Ron Paul at 0.45 a share. Obama is bringing in 0.59 a share, compared to Hillary's 0.54 and Edwards 0.32.

The most interesting news focused prediction market I was able to find, News Futures, gives users the option to buy contracts at a price they name. The below chart shows all activity for the last 30 days on the question: Will Nouri al-Malaki be the Iraqi Prime Minister through the remainder of Bush's presidency? The chart below tracks specifically contracts that bet he will not be prime minister much longer, which is exactly how I positioned myself on this matter. I have long held that only an Iraqi leader who speaks English and can target the American public directly will be a successful at earning its full support in the long term.


© NewsFutures

There is a general lack of imagination in the implementation of prediction markets when developing eLearning applications, particularly at the elementary level. Too many students grow up without even a remedial understanding of markets and market fundamentals, and the unique application of prediction market technology in the classroom at an early age may be what makes the difference in preparing students for life in a global-market economy. This is a topic that I plan to come back to after further research.

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