Tuesday, March 13, 2007

Help me re-start the Pittsburgh Stock Market ... really

Once Pittsburgh hosted the world's major oil exchange, later to become the Pittsburgh Stock exchange. The Burgh's own stock exchange would finally close in 1974 I believe.... but I have an idea that needs your help: Let's re-start the Pittsburgh Stock Exchange (sort of). There are now a plethora of online prediction markets that can help. Most only allow for users to buy and sell a fixed set of notional contracts, usually major events or major political races. Only a few allow you to create your own markets for things with more limited interest. Wouldn't it be great to have a market that could predict things like whether the Penguins will stay in town, or when the casino will open? We can do this.

So tried a number of sites that allow for ad-hoc markets.. most were pretty clunky to use, or seemed to have severe bandwidth/server issues. The one that worked best in my quick review was Inkling. So using their website I have created a number of contracts pertaining to events important here in the Burgh. Specifically it is now possible to bet I mean invest funny money on the answer to these questions which I have created 'markets' for:

1. When will a casino open in Pittsburgh

2. Will the Penguins announce relocation on or before April 1st, 2007

This is all a work in progress obviously. I will need to make some fixed site for these links, just so people can find them in the future. But there is no reason you can't bookmark those sites now.

The upside: if enough people participate, this could be the optimal predictor of a lot of things. Could be fun to see if the predictions that come out of the market wind up to be accurate. Get in on the ground floor, as they say.

The downside: you need to register with inking to use the system. (how? see the top right of the main Inkling page where it has a box labeled "sign up" which will then ask you to "send your email address" to get started). Who wants to register for another website I know? Also, you can't really win any money. If you could this would be tantamount to gambling and illegal to do on your own. So the only real payoff from doing well in these virtual markets is the satisfaction of doing well. I will add in whatever notoriety this blog can offer to those who do well trading in theses contracts. Not quite sure what that means right now, but I am open to suggestions.

Could be fun? Try it out if you can. I actually worked on this over the weekend and really told nobody about it. I just checked and there is already some activity in these markets.


Blogger Jim Morris said...

The Iowa Electronic Markets (iem.org) allow you to bet real money, up to $500, claiming that it's an educational activity.

I would think real money makes the results much more valid.

Cool idea!

Tuesday, March 13, 2007 10:58:00 AM  
Blogger C. Briem said...

I am sure real incentives produce better results.. but I didnt know that about the IEM.

but maybe this is still valuable, assuming it gets any participation. Years ago the experimental economics people at Pitt tried to address the issue of real money vs. fake (or token) money incentives. They actually took some experiments done in the lab here with token rewards and repeated them in another country where the dollar amounts represented significant amounts. I forget the conclusions but I think the results were generally consistent with what was observed here. That is from memory though, it was some time ago.

Tuesday, March 13, 2007 11:58:00 AM  

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