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Predictive Idea Markets Rules
Introduction
IBM Smarter Cities team is hosting prediction markets on topics related to cities. The objective of this market is to advance conversations around smarter cities using "wisdom of the crowd" approach. This forum gives you a unique opportunity to share your insights and see the collective opinions of your peers on the future of Smarter Cities.
Predictive Idea Markets utilizes stock market principles where participants get play money (100 tokens) to "trade" ideas they think have greatest chance for success. As a market participant, you will invest tokens, where each token represents your investment in the idea's success. You will invest in the ideas you believe are most likely to occur, and divest in those ideas which you do not support. Probability for each idea represents the likelihood of that potential outcome. For example, if there are four stocks in a market, each with the same pre-trading likelihood of occurring, they would each start at 25 tokens (representing 25% likelihood).
Market Duration
The prediction markets will commence on August 13th, 2009. All markets are expected to close on September 13th, 2009 at 11:59pm EDT.
Market Trading
Participants can buy or sell shares in any idea when the market is open. You are given 100 tokens to invest on each predictive idea market. The total numbers of tokens you can invest add up to 100 or less than a 100 for each market. You can enter a number in the text box or move the slider to allocate tokens to an idea. The probability of the ideas change based on the aggregate responses from the participants.
Winner
There will be no winners for the markets. Your investment in the idea will give us an indication to what a city needs to do to be smarter. Participants are encouraged to trade only in the markets in which they have some level of knowledge or insight. This allows the participant to trade honestly and intelligently as opposed to guessing.
There is no support for hedging, futures, derivatives or other trading methods. The markets will automatically execute each buy or sell order; a buy order will not sit in the trading queue waiting for a matching sell order, for example.