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[Betocracy][1] is a new website that allows you to create your own decision markets and opinion polls. If, like me, you have no idea what that means, allow me to give a quick overview.
Some time ago the Pentagon floated up an idea called the Policy Analysis Market, which would have allowed online traders to wager on the likelihood of future terrorist attacks. At first glance such a market may sound like a cynical and politically stupid move, which it was and that's why it was abandoned, but the idea behind the market is more than just a so-called death pool.
Decision markets, or predictive markets as they're sometimes called, operate on the same premise as the stock market; that is, a group of people buy and sell shares, but in this case the value of the shares are determined by the value of the judgments attached to them. [According to Wikipedia][4]:
>People who buy low and sell high are rewarded for improving the market prediction, while those who buy high and sell low are punished for degrading the market prediction. Evidence so far suggests that prediction markets are at least as accurate as other institutions predicting the same events with a similar pool of participants.
It may sound like little more than modified sports betting, but many economists believe that such markets can find hidden information about future events just like the soaring price of a stock can indicate a healthy company. [For the moment we'll ignore cases like Enron.]
Now thanks to Betocracy you can participate in this growing trend and easily create your own decision markets. The markets on Betocracy do not trade in actual money, but use a points system instead. Theoretically if the site takes off, shareholders with the highest points (i.e. those that buy low and sell high) will have a greater influence on the site.
I spoke briefly with Yaron Koren the man behind Betocracy about the site. Koren says he was "inspired to create the site by reading James Surowiecki's *The
Wisdom of Crowds*." He went on to add, "I was really struck by that idea of collective intelligence."
The idea behind Betocracy is to combine easy-to-use social internet tools with the predictive power of decision markets. Koren likens Betocracy to, "a cross between TradeSports and Blogger: bringing the concept of intuitive self-publishing to prediction markets.
The concept is fairly simple. Create an account, customize your page and create a market to display. You can choose to make your page public, publicly viewable but members only for usage or invite only.
I created a decision market based on [how the popular television show Lost will end][3]. My sample isn't probably the best since as I note on the page the results will be arbitrarily (and randomly I might add) decided by me. Hint: you can do better.
I'll admit that the whole things sounded a bit crazy to me when I first ran across it, but then again there were probably some folks that said the same thing four hundred years ago in Amsterdam.
Many thanks to the ever-prescient folks on the NoEnd mailing list for bring Betocray to my attention.
[1]: http://betocracy.com/ "Betocracy"
[3]: http://luxagraf.betocracy.com/market/8
[4]: http://en.wikipedia.org/wiki/Decision_market "Decision markets"
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