Subject: Re: Tom W. Bell paper
From: Thomas Lord <lord@emf.net>
Date: Fri, 01 Sep 2006 23:03:44 -0700

Don Marti wrote:
> begin Thomas Lord quotation of Fri, Sep 01, 2006 at 01:11:58PM -0700:
>
> (This is a great set of comments on the SPEX idea --
> Tom, have you written to Prof. Bell?)
>
>   

Thanks.   Are you serious about writing to him?   What
is a good reason to?

He seems a charming and interesting fellow:

    http://www.tomwbell.com/graphics.html

but on the topic of prediction markets he has a definite
entrepreneurial agenda of his own:

     http://www.simonmarket.org/

including, pardon me but, a certain insect intruding upon
his posterior re environmental issues.   Not that he is
wrong about poor reporting per se but, really:

    "The Simon Exchange will offer a shortcut to the future,
      offering a uniquely fast, accurate, and inexpensive way
      to answer complex scientific questions."


Huh.  Really?   And he kept a straight face the whole time?

Well, the Simon market marketing deserves intellectual
evisceration on its own terms but I'm not sure *I* want
to put that much energy into it.  I wouldn't expect to generate
much light by taking on the "Prediction Markets Whup on
Copyrights and Patents" angle.   I don't have the impression
of an invitation to serious discourse.

Aw, hell, I'll throw a copy at his blog and let's see what happens.

-t



>> Specifically, prediction markets *do not allocate* any of
>> the economic growth that results from a research
>> success.   Rather, prediction markets allocate some of the
>> risk of investment in research.  (But they perform that
>> allocation in an odd way, see below.)
>>     
>
> I'm thinking about ways that a SPEX (which I don't
> think is really a prediction market) can be used to
> hedge the "risk of non-innovation".
>
> Let's say you have a big data center, and there's a
> SPEX market trading predictions on "a computer will
> complete a certain large task in one hour or less
> using no more than 100 watt-hours of power".
>
> As an electricity customer, you're already taking
> risks in the energy market.  What if you could offset
> those risks by taking a position on the "no" side
> of the energy-efficient computer prediction market?
> Yes, the market is just moving risk, but it's not just
> moving it from one R&D area to another, but into R&D
> from a non-R&D market.
>
> Non-researchers won't siphon off researchers' rightful
> gains from a SPEX for the same reasons non-assassins
> won't siphon off assassins' rightful(?) gains from
> an assassination market.
>
>