And in 99.9% of the cases, she knows more about music than you and I do. But I bet she doesn’t know about this.

But boy was I turned off by the way they structure the show. First, they bus in 36 of the kids, and then helicopter in 4 of them, to act as town council. So rule #1 of the new future – embedded hierarchy. It’s kind of funny, I actually expected the kids would reproduce some sort of democracy/hierarchy, but what a problem if they ended up with either a radical democratic or fascist system – there’s a 14-year-old boy who was a candidate for the latter, to be sure.

Second, after forcing these kids to split into 4 arbitrary teams, so that they could compete against one another (go collectivism!), they set up the system of rewards and resource allocation. Let’s go to the tape:

The pioneers gather around the Chapel, where Jonathan rings the bell. Jonathan shows the Kids the Job Board, which will help provide a little order for Bonanza City. The Kids learn that they will be divided into four classes to run the town: Upper Class, Merchants, Cooks and Laborers. Each District will be responsible for chores related to their specific Class and will be paid accordingly in buffalo nickels.

• The Laborers will clean the outhouse, pick up garbage and haul water for the entire town, for the pay of just two buffalo nickels.
• The Cooks will be paid twenty-five cents each to cook for the town, do dishes and care for the town livestock.
• The Merchants will be paid fifty cents each to run a grocery store, dry goods store and a saloon that sells soda for a nickel.
• The Upper Class gets an entire dollar and can do whatever they choose.

Ok, seriously, what the hell!? This part just steams me – of the limitless ways that authority and resources could be allocated, two of the most important elements for this little experiment, adults impose an unelected council and an unequal class system.

One of two things are going to happen now. Either the kids are going to rise up and decide this is a stupid way to start running a town – or I’m going to lose interest. WTF, CBS.

UPDATE: What the heck, I google ‘inequality United States’ and of the three top hits, one is the Heritage Foundation, one is the US Census, and one is the Becker-Posner blog? Is this for reals?

1) Information markets are rarely the same as other futures markets. The basis for a futures market – and we’ll take them on their own terms here – is that there is a future, calculable risk that one group doesn’t want and that another group is willing to take in return for profits. Farmers worry about future prices, banks worry about future interest rates, Mattel worries about the future costs of plastic (and Euros). They hedge these risks, laying them off to speculators, who are willing to take on some risks in return for profit. Given enough speculators and hedgers (ie a liquid market), both risk and profit are re-allocated so as to shift the risk to someone who will take it and profit to someone willing to take risk for it.

In information markets, there is no risk, there are no hedgers. This is not like other futures markets. It is an aggregation of opinions, and profits accrue to those who have the best information, ability to analyze future events, or who simply are best at guessing future informational states of the world. This is powerful, per the wisdom of crowds, but it shares a name with markets without being quite the same thing.

2) Information markets should work best when they elicit adverse information. That is, as someone like Hayek would argue, markets work because they induce participants to give up private information in return for profit. Making this information public, in the form of market prices, makes the market more accurately reflect the totality of information in the world. So in some cases, you want insiders trading, since they have the most valuable information. (I’m going to leave aside market design here, since there’s the issue of whether others will continue to participate if they are being effectively suckered by insiders with better information).

3) Information markets should be outstanding at disseminating informational certainty as soon as it is possible to do so. If an event becomes inevitable (or close to it), we should see information markets rush very quickly to profit from that. Here, it’s a speed game. As soon as ‘real’ news comes out, it should flow into market prices like a hot knife through butter.

4) Information markets are only as good as their designated contract outcomes. They don’t tell about the world per se, they tell about the particular contract. They lack discretion beyond their design.

5) Prediction markets should be as bad at predicting non-straight-line futures as anyone else. There is no theoretical reason why information markets should be any better than anyone else at predicting events that are not obvious or that don’t flow from the current state of the world.

6) Particularly in winner-take-all information markets, we have no good way of knowing whether they are right or not – that is, they are a blunt instrument. Let’s say there is a 60% chance that X will happen in six months, according the pricing in an information market. And let’s say it happens. Does that mean there really was a 60% chance of it happening since months earlier? There may have been a 1% chance – or a 100% chance. This is simply unknown, and more interestingly, unmeasurable.

7) Information markets will indeed replace independent judgement, and we will be worse off for it. We know not nearly enough about expertise, discretion, judgement, and the ways that these things intersect with information.

Before we left, I checked the AA website and the flightchecker widget on my Mac. AA says the flight is on time, flightchecker says it’s delayed by 40 minutes. When we checked in at the pre-security gate, the flight was listed as ‘on time’. At the gate, the flight was listed as delayed by 45 minutes (assumedly for weather, we never really found out). Gate was changed, again for unknown and unannounced reason.

I won’t even touch on security, though there is a dissertation in there about the transformation of undirected, amorphous anxiety into specific fears. So instead of just being afraid of bad stuff happening, we’re told to be wary of particular kinds of things – whether or not these things are at all correlated to actual security. It’s not, as many suggest, an illusion of security. It is the channeling of fear into specific concern. These are different propositions.

The new proposition for American Airlines is to give you beverages and sell you food. $3 for a candy bar. Rock on, AA, this is clearly where your future profits will all be recouped.

Upon arrival, I noticed that the traditional norm of waiting for people in front of you to get off the plane before you take off down the aisle seems also to be gone.

And an hour late, with our bags in tow, this actually constitutes a good experience in air travel now.

If I was senior management for this airline, I would be embarrassed. I would be ashamed. I wonder if s/he is.

From Futures Industry Magazine:

Energy is one of the hottest areas for algorithmic futures trading right now. Especially for the high-frequency trading community. Over the past two years, the IntercontinentalExchange has invested heavily in its technology platform to make its energy futures market more attractive to algorithmic traders, improving both its speed and capacity. Once the New York Mercantile Exchange listed its crude oil contract for round-the-clock trading on Globex in August 2006, the race was on.

“As soon as Nymex moved to Globex, we started getting calls,” says Jesper Alfredsson, head of algorithmic trading at Orc Software. “The Globex platform is well known to algorithmic traders, and the arbitrage with ICE is suited very well for that kind of trading.”

Both exchanges offer a FIX-based application programming interface and both permit trading firms to locate their servers close to their matching engines. (See “Co- Location Catches On”.) This gives electronic traders rapid access to their markets, with order message round-trip times measured in milliseconds.

In June of this year, Nymex gave another push to the trend, listing options on its energy and metals futures on the Globex platform. Alfredsson sees this as especially interesting for options market makers active in other electronic options markets, who can now apply the same automated quoting technology in a class of options that up to now have traded either on the Nymex floor or in the over-the-counter markets, neither of which is suited for algorithmic trading.

The lesson? The content of the contract is pretty arbitrary compared to the institutional mechanism that determines the trading strategy.

This may parallel a bit Ann Swidler’s argument about culture during ‘settled’ and ‘unsettled’ times, though here it’s not entirely clear what a settled market really is – art markets have been around forever, are quite stable, it’s hard to think of them as settled. Contested vs. uncontested is closer, but I’m still trying to manage the distinctions.

The danger here, is the theoretical blindness vis-a-vis the opposite quadrants of the box. More recent work (Kieran, some of the STS) is moving towards trying to understand the way settled markets are also culture, and unsettled markets also have a culture. Shifting from continuum to a more orthgonal theoretical conception is where the innovation is at the moment.

My two examples are pollution and commodities markets, where I’ve done work. We’ll see how this turns out..

2) I found the sessions less inspiring than I have in past years. I don’t know what this is about – it could be that when the conference is in the city in which you live, you have a different relationship to the conference. It could be that the sessions were less interesting. It could be that I’m at a moment where I’m finding it hard to be inspired by, and to learn from, other people’s work. I hope it’s one of the first two.

3) I really continue to enjoy connecting with friends and colleagues. It seems there are clusters of colleagues, but my favorite kind are the ones that contain people who I care about, and whose work I find interesting. They don’t give as much a crap about status, and they treat me and others not as potential antagonists, but as potential colleagues and collaborators. There continue to be these folks from my graduate school days, and I feel I’ve hopefully added some along the way.

4) Kieran Healy is smart and nice, and he calmed me down at a key technological juncture that could have been a lot more disastrous than it ended up being.

5) Substantively, there’s a lot of work to do. Networks are getting a bit short shrift as compared to years past, and while there is buzz about performativity and STS, the work isn’t there yet. I know what I mean by it, but I don’t think it’s the same thing that, say, Philip Mirowski means by it. I’m not sure this is such a bad thing, but there’s still a lot of slippery conceptualization of this area at this moment.

6) My own preference is to not worry about the economists-make-markets / economists-discover-markets distinction too much, as I think it’s a rabbit trail. Interesting, potentially radical, but ultimately less helpful than some of the more proximate insights. My own pet is something like price ontology and its contours, but whatever. The forms and processes of formatting markets is really interesting. What are mechanisms for transforming people into market actors, interest into rationality, etc. etc.? How does these processes interact with organizational structures, environments, cognitive schema, regulation? I want to really know more about these kinds of things.

7) More people should pay attention to Ryon Lancaster and Mike Sauder. They are both smart, interesting, have souls, and they’ll be in the top echelon of sociologists in a decade.
Organize roundtables once in your career, and then never do it again.