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The Tech Buzz Game

The Tech Buzz Game. Rael Dornfest Bernard Mangold, Mike Dooley, Gary Flake, Havi Hoffman, Tej Kasturi, David Pennock. Tech Buzz Game http://buzz.research.yahoo.com. Outline. What is the Tech Buzz Game? Status and war stories And the winners are ...

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The Tech Buzz Game

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  1. The Tech Buzz Game Rael Dornfest Bernard Mangold, Mike Dooley,Gary Flake, Havi Hoffman, Tej Kasturi, David Pennock

  2. Tech Buzz Gamehttp://buzz.research.yahoo.com

  3. Outline • What is the Tech Buzz Game? • Status and war stories • And the winners are ... • Buzz Game Version 0.2:focus on Open Source

  4. Tech Buzz Game v0.1 • Launched at O’Reilly ETech Conference • Powered by software • 47 markets, 352 stocks in bleeding edge tech • BitTorrent, podcasting, knoppix, open Solaris, ... • Technologies on O’Reilly’s radar • Goal: Predict what technologies people will be searching for tomorrow • Research goals • Can market be a leading indicator of buzz/popularity? • Test new Y! invention: dynamic pari-mutuel market

  5. Exchange InterfaceDynamic Parimutuel “Market Maker”

  6. Wi-Fi vs. WiMax

  7. v0.1 Stats • Press: Wash Post, NPR, G4TV, C|Net, ZDNet, eWeek, Business Week • Blogs: /., Battelle, widespread • Stats as of 10am March 23 2005 • 13,310 accounts • 117,530 orders • $88,480,577 total market capitalization • 46,379,241 outstanding shares • 2.7M page requests

  8. v0.1 Stats last week* last 2 weeks last 3 weeks logins 679 1078 1378 new users 138 324 561 transactions 4124 8855 13,728 pages served 420,000 850,000 1,245,000 * As of June 20 2005

  9. Hacker Spirit • Blackhat • Cheating, multiple accounts, auto account creation, collusion • Whitehat • Scripts, scrapers, bots, api programming • Equations, math, simulations • Sharing solutions, data, code • Finding market loopholes • Greyhat • Exploiting market loopholes

  10. Market Crash ~ March 27, 2005

  11. Arbitrage Loophole 2) BUY 4) SELL 1) BUY 3) SELL Cash: $10,000 Cash: $10,500

  12. Dynamic Pari-mutuelPrice Function • Money-ratio price function • Arbitrage flaw • Share-ratio price function • No arbitrage possible • Currently running with no problems • Vetted by academic peer review, internal testing, two weeks live, ... • Took a couple of 17 year olds to find, exploit • Once discovered, spread fast

  13. Rumor Mill

  14. Droolworthy

  15. P2P

  16. Linux: Ubuntu

  17. Maps: Google Maps

  18. Browser Wars

  19. Operating systems

  20. API

  21. Tech Buzz Game

  22. Dynamic pari-mutuel market • New financial mech for speculating on or hedging against an uncertain event; Cross btw PM & CDA • Combines good properties of both • No risk to market institution (DPM,CDA,PM) • Infinite liquidity for buying/selling (DPM,PM) • Continuously incorporate new info;allow cash-out to lock gain, limit loss (DPM,CDA)

  23. Pari-mutuel marketBasic idea 1 1 1 1 1 1 1 1 1 1 1 1

  24. Dynamic pari-mutuel marketBasic idea 1 1.1 1 1.3 0.2 0.4 1.6 0.9 2 2.5 3

  25. How are prices set? • A price function pi(n) gives the instantaneous price of an infinitesimal additional share beyond the nth • Cost of buying n shares: 0n pi(n) dn • Different reasonable assumptions lead to different price functions

  26. Price functions

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