Category Archives: writing

prediction markets, research, woblomo

Should there be a Prediction Market Institute?

4 Comments

There’s a Prediction Market Industry Association (sort of).

Is it time for a Prediction Market Institute dedicated to scientific advancement and engineering innovation in prediction markets?

On the face of it, the concept is ludicrous: there is no “Support Vector Machine Institute”, for example. But a bunch of tech companies have PM research efforts of some sort, including Google, HP, Microsoft, and Yahoo!. Folks at these companies have come together to lobby, to speak, and to exchange academic research results. Would YaHPooglesoft fund such an institute? If not, who? Chris Masse, who adds “PM journalism” to the list of institute goals, is on the case.

gambling, woblomo

Innovation (or lack thereof) in casino gambling

37 Comments

Casino floors from Macau to Mississippi look eerily similar. The slot machine seas. The table game islands. The high-limit oases. The restaurants, shows, buffets. The colorful currency. The slot machines. The excruciating check-in lines. Minimum bet forced scarcity. The bleeping beeping slot machines.

The games themselves are for the most part the same that people have played for centuries, with rare exceptions. People flock to the games they already know: blackjack, craps, baccarat. Is this a matter of making gamblers comfortable wherever they go, luring them into a wallet-emptying rhythm? Have casinos evolved to perfection, like sharks? It seems ironic that gamblers who clearly exhibit risky behavior only want to deal with games that are known and familiar. Is there room for innovation in casino gambling? Is this a fat satiated industry resting on its laurels ready for a spark of creativity to ignite a shakeup, or a smart, precisely tuned machine already operating at full throttle in optimized mode, thank you very much?

For example, innovation in slot machine design seems to involve replacing spinning wheels with LCD screens that display in gorgeous 3D detail… spinning wheels. The greatest advance in poker technology has been the hole-card camera, enabling more engaging television coverage.

Outside of the casino, companies like betfair and twinspires are shaking up their respective industries. Why do casinos seem to be standing still?

I’d love to see an experimental marketplace where people play and invent new gambling games, and where breakout winners move on to trials in the “big leagues”. Would it ever fly? Would gamblers bother to play, or are they by and large unimaginative creatures of habit?

P.S. Did I mention that the woblomo deadline is midnight Hawaii time?


time in Hawaii

advertising, economics, woblomo

Bem+Wom happens: The ALL-ETT wallet anecdote



pocket
mousetrap

Ernie told me about it. Sid and I told Lance who blogged it. Bill Gasarch read it, bought it, loved it, and blogged it again.

And so it goes for ALL-ETT, the ultimate wallet. Bem+Wom: BEtter Mousetrap + Word Of Mouth. It actually works.

It works for Google too:

[Google’s] growth has come not through TV ad campaigns, but through word of mouth from one satisfied user to another

And now, a viral restaurant.

But, beyond anecdote, continuing from the previous post, is this sort of thing worth $15 billion?

Companies with Bem benefit hugely from Wom and will happily pay for it.

And social networks are nothing if not mouths exchanging words, so it’s natural to think of some paid version of Bem+Wom as their killer app. Facebook Beacon is an innovative attempt despite the overblown backlash.

Paying mouths for words is affiliate marketing, a respectable if not Google-sized business. But turning friends (or celebrities) into salespeople induces a threshold of skepticism, as it should. Paid mouths’ faces must be awfully trustworthy, their words especially persuasive to be believed. Is it even “word of mouth” anymore?

Can Bem+Wom be monetized without mucking it up?

advertising, challenges, economics, new media, woblomo, yahoo

The social advertising puzzle

7 Comments

There’s no doubt that social ties have tremendous value: people find love and work largely through the people they know and the people the people they know know.

And there’s no doubt that digital representations of social ties add value. Facebook does improve people’s lives.1

The puzzle, and one of the key challenges facing companies like Facebook, Google, and Yahoo!., is how social media can make money. So far the evidence is most users won’t pay directly, which leaves ideas like virtual goods, community marketplaces, app stores, and, of course, advertising. Unfortunately, although we know great ways to advertise to people searching, and decent ways to advertise to people viewing content, it’s less clear how to advertise to people communicating.

P&G’s Ted McConnell puts it bluntly:

What in heaven’s name made you think you could monetize the real estate in which somebody is breaking up with their girlfriend?

Riffing off of this quote, Wired asks the $15 billion question: Is social advertising an oxymoron?:

So, what if social media and advertising just don’t mix?

SocialMedia.com, a social advertising startup, begs to differ (hat tip to Cong Yu), reacting to the same provocative McConnell quote. Their answer:

Advertisers only pay when users volunteer to say something about the brand to their friends.

Indeed, this sort of paid version of Bem+Wom (“BEtter Mousetrap + Word Of Mouth”) — more on this in the next post — is one of the first things people think of when pondering how to monetize a social network. But can it work well and if so, how?

Three disjoint friends like Rooster Sauce. Who knew?

1For example, I never would have guessed that three completely disjoint friends of mine are all fans of Sriracha Rooster Sauce. Who knew?
advertising, economics, finance, prediction markets, woblomo

Wall Street's version of a combinatorial market

3 Comments

I was poking around TD AMERITRADE and came across this description of conditional orders (login required, or look here), or sequences of orders that are synchronized in various ways:

What is a conditional order and how do I place one?

Conditional orders let you combine two or three individual orders that will, if filled, either cancel or trigger additional orders. Conditional orders are available for both stocks and single-leg option orders (in option-approved accounts).

The following types of conditional orders are available:

  • OCA (one cancels another) – submit two orders simultaneously; if one order is filled, the other is canceled.
  • OTA (one triggers another) – submit an order and if that order is filled, submit another order.
  • OTT (one triggers two) – submit an order and if that order is filled, submit two additional orders.
  • OT/OCA (one triggers an OCA order) – submit an order; if that order is filled, submit two orders simultaneously; if one of these orders is filled, cancel the other.
  • OT/OTA (one triggers an OTA order) – submit an order; if that order is filled, submit another order. If that order is filled, submit a third order.

At first glance these resemble combinatorial bids that allow traders to buy several things at once, but they’re not. They’re more like bidding agent programs that describe exactly what to do when under various conditions: more complex, but not fundamentally different, than limit orders and stop-loss orders. They can be executed without any cooperation from the exchange.

This brings to light a key distinction: some forms of expressiveness can be achieved by layering increasingly complicated bidding agents on top of an existing exchange. Other types of expressiveness, for example true combinatorial bids, require new optimization routines put directly into the exchange.

The distinction arises in advertising as well. In a sponsored search auction, advertisers can bid lower during the day when people tend to browse and higher in the evening when people tend to buy, and they can even write a program to do it for them automatically. However an advertiser cannot execute a “guaranteed delivery” contract in sponsored search without changing the underlying auction mechanism.

Why should we care about the latter type of expressiveness that requires “smarter” exchange mechanisms? One word: efficiency. Economic efficiency, that is. With greater expressiveness, resources can be shuffled to align more precisely with who wants them the most. Advertising opportunities (a particular user’s attention on a particular page) can go to advertisers who value them most. Financial transactions that otherwise might go unmet can be consummated. Insurance buyers can get better coverage. And gamblers can have more fun.

publication, technology, woblomo, writing

What do you want to be when you grow up?

The first semi-serious answer I remember giving to the title question was “either a writer or a magician” (circa third grade, more about age 8-9).

Given this quote:

Any sufficiently advanced technology is indistinguishable from magic. –Arthur C. Clarke

and the fact that likely the most tangible record of my career are my publications, one might say that I did indeed become both a writer and a magician.

blogging, challenges, fun, oddhead blog

March is World Blogging Month (WoBloMo)

5 Comments

I’m planning to take the World Blogging Month (WoBloMo) challenge in March. Join me!

The goal is simple: blog at least every other day from March 1 to March 31. Post something — anything — on every odd day of the month and you win. Skip any day not divisible by 2 and you lose.

Many bloggers already write every day or nearly so. More power to them. For the rest of us, who blog infrequently and spend copious time arguing with their inner editors, ludicrous and artificial pretenses can be a good thing.

WoBloMo resembles the write-a-novel-in-a-month contest NaNoWriMo and other timed artistic challenges prefaced on the idea that quantity and quality can be friends. By suppressing the Spock-like perfectionist inside you, you can bring out your inner Kirk and “just do it”. Agonizing over details always has diminishing returns and sometimes, perversely, can make things worse. Or so the theory goes. You be the judge once (if) my WoBloMo fountain erupts.

Added 2009/02/26: Full disclosure.

economics, incentives, oddhead blog, spam

Intelligent blog spam

23 Comments

As I alluded to previously, I seem to be getting “intelligent spam” on my blog: comments that pass the re-captcha test and seem on-topic, yet upon further inspection clearly constitute link spam: either the author URI or a link in the comment body is spam.

Here is one of the most clear cases, received on January 9 as a comment to my post on the CFTC’s call for proposals to regulate prediction markets:

Date: Fri, 9 Jan 2009 01:28:01 -0800
From: Matt.Herdy
New comment on your post #71 “A historic MayDay: The US
government’s call for help on regulating prediction markets”
Author : Matt.Herdy
Comment:
Thanks for that post. I’ll put a note in the post.

1. It’s nothing new. The CFTC will just formalize the current
status quo.
2. We are prisoner of the CFTC regulations and the US Congress’
distaste of sports “gambling”. As for the profitability of prediction
exchanges in that strict environment, I don’t see how you can deny that
HedgeStreet went bankrupt even though it was well funded. Isn’t that a
hard fact?
3. You’re right, but all “pragmatists” should follow a business
plan and make profits. See point #2. Pragmatists won’t make miracles.

<a href=”http://www.stretch-marks-help.com/”>Removing stretch marks</a>

At first blush, the comments seems to come from a knowledgeable person: they refer to HedgeStreet, an extremely relevant yet mostly unknown company that’s not mentioned anywhere else in the post or other comments.

It turns out the comments seem intelligent because they are. In fact, they’re copied word for word from Chris Masse’s comments on his own blog.

Chris Masse’s page has a link to my page, so it could have been discovered with a “link:” query to a search engine.

Though now I understand what this spammer did, I remain puzzled exactly how they did it and especially why.

  1. Are these comments being inserted by people, perhaps hired on Mechanical Turk or other underground equivalent? Or are they coming from robots who have either broken re-captcha or the security of my blog? (John suspects a security breach.)
  2. Is it really worth it economically? All links in blog comments are NOFOLLOW links anyway, and disregarded by search engines for ranking purposes, so what is the point? Are they looking for actual humans to click these links?

In any case, it seems an intriguing development in the spam arms race. Are other bloggers getting “intelligent spam”? Does anyone know how it’s done and why?

Update 2010/07: Oh, the irony. I got a number of intelligent seeming comments on this post about SEO, nofollow, economics of spam, etc. that were… promoting spammy links. I left them for humor value though disabled the links.

blogging, oddhead blog, web services

Quantcast, Scribd, and the two-minute web service signup

2 Comments

I joined the quantcast audience measurement service. It took about two minutes to sign up and initiate tracking. I’m impressed with the ease of use, the utility, and the inroads the company has made in the year or so since former Yahoo Mike Speiser first showed it to me.

Looks like I’m getting about 1000 visitors a month, roughly 3/4 that of Chris, 1/6 of Robin, 1/10 of Lance, 0.00079% of my employer, and 0.00073% of my employer’s frenemy.

I also joined the scribd document hosting service (“Youtube for documents”) and used it to embed a PDF in my previous post. Again, from signup to service took a matter of minutes. (I think scribd could be great for hosting my publications which are in need of both a content and interface update.)

Probably there’s some sort of business axiom here, probably already blogged and book-ed: the two minute rule of successful web services.

oddhead blog

26 comments released from purgatory

Sorry folks, I just released 26 comments from purgatory where they had been sitting for as long as 58 days. All pending comments have now been approved and posted. I’ll try to go through them soon and respond where appropriate.

About two months ago I changed my WordPress configuration and it turns out that comments were piling up for moderation without email notification, and I failed to spot the growing queue until now.

Since I’m using re-captcha and have turned off trackbacks, I shouldn’t need to moderate comments going forward, so I’ve turned off moderation (fingers crossed).