ZocaloDeveloping Open Source Prediction Market

Software

Chris HibbertCommerceNet Labs

DIMACS Workshop on Markets as Predictive Devices4 February 2005

2© 2005 Chris Hibbert DIMACS, 4 February 2005

Zocalo: Challenges•My Objective:

•Promote broader use of Prediction Markets

•Our Opportunity:•CommerceNet is starting an e-

commerce lab.

•One Key Obstacle: •No common software platform for

prediction markets yet.

3© 2005 Chris Hibbert DIMACS, 4 February 2005

Zocalo: A Proposal•Our Proposed Solution:

•Catalyze development of an Open Source toolkit for Experimental (& Real) markets.

•Call to Action:• Identify promising “wheels to stop re-

inventing.”•Collaborate with us on your next

experiment.•Help us make the case to CommerceNet.

4© 2005 Chris Hibbert DIMACS, 4 February 2005

Outline•My Background and Incentives

•Why me?

•The Target Markets for Zocalo•Who should care?

•Why aren’t PM Toolkits Available Already?

•Benefits of Open Source•Design for Flexibility•Benefits of Working with CommerceNet

5© 2005 Chris Hibbert DIMACS, 4 February 2005

My Background• MIT, Xerox PARC• Managed S/W Development for 12 Years

• Teams of 3 to 15 people• E-Commerce projects at Agorics, Inc.• Project Manager, Architect for GuardPoste

Secure EMail Server, recently sold to Microsoft

• Extensive Experience with Electronic Commerce• Internal E-Commerce at Sun Labs.• Electronic Check (IBM, Sun, Top-10 banks)

• Strong background in Economics• Have deployed and written Idea Futures S/W

6© 2005 Chris Hibbert DIMACS, 4 February 2005

Target Audiences

.eduEcon Departments

Show how markets work

.comBusiness

Planning, Trading

CommerceNet.org

SimonMarket.orgPolicy Discussion

7© 2005 Chris Hibbert DIMACS, 4 February 2005

Why Aren’t Prediction Market Toolkits

Available?•Researchers focus on running experiments:•Little reward for publishing software.•Toolkits emerge once experiments are

systematized

•Corporate users develop proprietary solutions:•Consulting, not general-purpose

infrastructure.

•CommerceNet’s motivation is different:• Its research focus is software engineering.•Has track record of sharing software that

creates new markets for electronic commerce.

8© 2005 Chris Hibbert DIMACS, 4 February 2005

Benefits of Open Source•Open Source Packages Best Practices

and Makes it Accessible•Later Users can Add Value to the

Foundation•Every Econ or Business Student Should

Learn How to Put Together a Market•Entrepreneurs Will Invent New Uses

and Apply Markets in More Ways•Some Will be Contributed Back to the

OS project

9© 2005 Chris Hibbert DIMACS, 4 February 2005

The Zocalo Toolkit Design

• Develop a Variety of Exchange Tools• Support CDA and Call Markets• Trade Predictions or Virtual Commodities• Handle Play Money or Valuable Goods

• Support for Experiments• Instrument all Activity• Export Data in Useful Formats for Analysis

• Apply Current S/W Development Approaches• Flexible Support for UIs• Scalability, Decentralization, Security

10© 2005 Chris Hibbert DIMACS, 4 February 2005

Who is CommerceNet?• 10-Year Old Non-Profit with Money• Mission is Promoting New Forms of E-

Commerce• Neutral Party that Convenes Interest Groups

to Create Common Tools• e.g. E-Commerce, XML, Audience

Measurement

• Fosters Entrepreneurs• Creating a New Software Research Lab

• Focus on Decentralization and E-Commerce• zClassifieds, zMart, would use Zocalo

11© 2005 Chris Hibbert DIMACS, 4 February 2005

Project Phases• First Step:

• Collect Requirements• Support Experiments; Work with Experimenters• Demonstrate Reuse

• Short Term:• Expand Variety of Market Institutions• Ensure Easy Configurability

• Medium Term:• Deploy Internal Pilots to Businesses• Develop support for Confederations of Markets

• Long Term:• Deploy Public Markets with Partners

12© 2005 Chris Hibbert DIMACS, 4 February 2005

Collaboration Possibilities

• Collaboration is one of CommerceNet’s Strengths• We are Looking for Partners

• (S/W Developers, Experimenters, Entrepreneurs)

• Express Your Interest• Describe Your Needs• Tell us When You want to Deploy a Market

• White Paper available in Februarychris.hibbert@commerce.net

• http://zLab.Commerce.Net• http://blog.Commerce.Net