(Notes from Legal Futures, Hal Varian)

The Kaplan program @ Santa Fe Institute. Everyone else wanted to prove their theory was correct, but he really needed the 10,000 prize. He let everyone else do the price discovery, then he snatched all the trades. An index fund — you’re letting markets decide on the price then you’re buying at the market. Soon, everyone else was doing this. But, then there was no one setting the price. So, this is what the markets can’t do.

The process of trade creates volitility in the market.

Prediction markets at Google. Most things the market was predicting management already knew (more useful in more heirerchial organizations). Run the risk of every person in the market declared an indider. Everything that’s interesting you can’t ask.

Crowdsourcing will never work to produce new things. Why do you think Wikipedia works? When people came to the site, they already knew what an encyclopedia was.

Crowdsourcing think about:
who the crowd is
shared knowledge going in
the technology that’s used to coordinate