The Buzz Factor

I stumbled upon a great website experiment in prediction markets. I was first introduced the the concept of prediction markets in James Surowiecki’s book The Wisdom of Crowds. What is a prediction market? It’s a speculative market where people buy and sell shares in pretty much anything. It’s been used to predict the outcome of presidential elections with uncanny accuracy, since it does not factor in who the “investor” wants to win, but who they believe actually will win.

The Buzz Game creates a virtual market where anyone can sign-up and begin trading. There is no cost, and you start with $10,000 to invest. The markets are based on O’Reilly’s Radar – a blog that tracks emerging technologies – and uses Yahoo’s own Buzz factor to determine the value of each share. The more someone searches for something, the greater the “buzz” (relative to the other “things” in a given market, of course).

Visit The Buzz Game, setup an account and see if you can track what’s buzzing better than me — I’m up $248 in just a few days. Oh, be sure to check out my favorite market: instant messaging.