Betocracy is a new site offering easy to use tools for the creation of prediction markets on websites. Though in Beta, Betocracy has markets covering the Democratic Presidential Nominee in 2008 as well as a Stock Market for the popular Second-Life multi-player role-playing universe. Betocracy was created by freelance web developer Yaron Koren.
Prediction Markets are best understood like a combination of a stock market and the bookie at a horse race, where users bet for or against events occurring. The event can be anything: will the horse win the race, will the stock price go up, or, who will win the election? The Washington Stock Exchange is a similar product dedicated to the political arena. The website uses points instead of money, so there is no real risk of great loss (other than the time spent on the websites using predictive markets).
However, Betocracy is quick to point out that even the points reflect real value in the terms of predictive data. According to Yaron:
"...the administrators of a site can always choose to reward those who have done well on their markets, where laws permit."
It will be interesting to see if Betocracy can truly play fortune teller.
Special thanks to LBJ for assisting with the information in this article.
