A Googler on Prediction Markets
June 20, 2010
One of Endeca’s wizards jumped to Google. I have not paid much attention to what former Endeca Googlers do. The machinations of the Google are too far removed from the goose pond here in Harrod’s Creek. However, a reader sent me a link to the story “Why Can’t We Just Use Prediction Markets?” I read the article and did not find much with which to disagree. However, I asked myself, “Is this write up about prediction markets a personal opinion or one of those moments when a Googler sends a signal (intentionally or unintentionally) about notions that fascinate the users of MOMA.
For the fun of it, let’s assume that the article does reveal a fragment of Google’s thinking about the importance and utility of prediction markets. As you may know, a prediction market takes guesses and tries to figure out the future. There are many fancy ways to explain the method, but the idea is that some unidentified, latent magic exists when people offer opinions or bet on something. The data provide a glimpse of the future. I wish to point out that the US government has been known to think about prediction markets, and we know how well most US government decisions work out. Here in Harrod’s Creek we don’t need a predication market to figure out that there will be some unhappy people where the BP “spill” adds to the salty sea air zest.
Three items warrant comment for this alternative view of the write up.
First, the article suggests reviews (Amazon, are your with me here) can be manipulated by humans. The notion of a prediction method might generate a more useful indicator about a product. I think numerical recipes processing Big Data can yield some useful outputs. Google could make a run at Amazon and other review sites, right?
Second, the notion of using data to bet that I would like something also makes sense. I can see the Google kicking the notion of reviews into recommendation land. Again, I am thinking of Amazon and its recommendations. Maybe Google will be doing recommendations in its forthcoming Google TV service. What do you think about the Google predicting what rich media will make you a happy buyer or camper?
Finally, the concept of accuracy is delightful. Now accuracy in the Math Club works out to the old six nines confidence level. But accuracy also means a confidence score better than the lousy confidence score generated by other systems. If Google can generate a higher confidence score, that will give the company an edge. We are not talking about perfection. We are talking about “better than”, right?
My take.
Google will be rolling out more recommendations and predictive services. You may not use them directly, but these methods will allow the company to suggest that if you liked the NBC TV show about Google, you will definitely love these other TV shows. No humans needed to publish this type of indirect Consumers Report information. Many other uses as well I assert.
Now that’s my take away from the article.
Stephen E Arnold, June 20, 2010
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