Tuesday, June 26, 2012

Inkling's 1%

How do you keep a prediction market interesting for the 1%? And more importantly, if there is truly a 1% in the distribution of wealth, how do you also keep a prediction market interesting for the 99%?

The Inkling public marketplace has been around for over 5 years now. Over that time, 38 people have amassed earnings over 1,000,000 inkles. Most of them are still playing to this day, but it's a challenge to keep them entertained. Many only play in questions which can earn them a significant amount. They submit questions whose starting prices are out of reach for anyone but the most wealthy because the larger trades keep it interesting. Meanwhile people new to the application know it's virtually impossible to crack this exclusive club without making a very significant time commitment and  also being good at predicting things.

I've been looking around and I've yet to find anything written about this specific problem in prediction markets, but there are certainly corollaries to regular gaming. What do you do with the people who can beat the game, or play for so long they're regularly reaching the top levels and may be more skilled than the game creator themselves? Usually that's when v2 of the game comes out with new challenges, better graphics, better teaming features, new weapons, etc. and an entirely new chance at making money from your users.

Unfortunately a complete conceptual revamp isn't really in the cards right now so we have to look for other solutions.

We've had suggestions from people to limit the size of trades that can be made, or simply zero everyone's account and start all over again. But this money has been hard earned and I've always been a big proponent of not "messing around" with people's balances. Thus other suggestions of real-world style approaches such as taxes and redistribution of wealth are also off the table.

I think ultimately the right answer will be to deemphasize money earned as the primary focus of the site and create "local" competition among people with comparable balances or other comparable demographics. The guy in position 18,345 shouldn't be worried about the guy in fifth, but he could be easily focused on moving up to 18,344. This is certainly a popular way of doing "best of " leader boards now.

I could also see moving completely away from "best of" leader boards and starting to create leader boards based on your demographic profile or other attributes. Here's how you're doing against other people in your hometown. Here's how you're doing in your age bracket. Here's how you're doing in a particular category of question. Here's how you're doing against people who started in the same day, month, or year you did. There still might be some whales in these leader boards you need to contend with, but the more leader boards we have, the easier it will be to find a niche for yourself and feel like you should continue to put time in to get to the top.

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