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Saturday, 31 March 2007

Newsgame crystalizes the wisdom of the crowd

Danish TVstation TV2 has recently implemented a remarkably impressing new service, building upon the contribution of the users in crystalizing "the wisdom of the crowd".

The service - Nyhedsspillet ("the news game") - is a place for trading opinions on what will happen on a number of different questions (called shares), put forward by TV2. For example you can buy the share "Harry Potter will die in the next book" for the price of currently 61 points. And if Harry Potter really turns out to be dead when the last page is turned in Harry Potter 7, expected this summer, TV2 pays you 100 points for each share in your possesion.
However you're free to sell you shares, before the book hits the shelfs, for the number of points, the other users are willing to pay. If they all firmly believe Harry Potter IS going to die, they'll be willing to pay you very close to 100 points for each share.

What's facinating is, that the price of the share in this ways comes to indicate very precisely how likely the users believe the given outcome of the event (for example that Harry Potter dies) is. If the price is 50, this means that the demand (and therefore belief in dead of Harry Potter) precisely equals the supply (and therefore disbelief in the dead of Harry Potter). A price higher than 50 means the users have a stronger belief in his dead than the other way around. In short: the price of the share at any time is the very probality that the event the share is about, comes true, as percieved by the users.

In this way the News Game is highly interesting cross-over of bookmaking and opinion polling. A way of engaging the users, abstracting their knowledge and translating it into a single and very usefull figure. If the number of users is large enough, and the questions are rightly put, the TV2 news game will actually reveal the wisdom of the crowd, turning "the silent masses" into a vast news generating machine.

(I originally published this post at the New Media Trends blog)

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