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Logarithmic Market Scoring Rules for Modular Combinatorial Information Aggregation [Robin Hanson, 2002] Roi Meron 07-Nov-12Seminar in Information Markets,

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Presentation on theme: "Logarithmic Market Scoring Rules for Modular Combinatorial Information Aggregation [Robin Hanson, 2002] Roi Meron 07-Nov-12Seminar in Information Markets,"— Presentation transcript:

1 Logarithmic Market Scoring Rules for Modular Combinatorial Information Aggregation [Robin Hanson, 2002] Roi Meron 07-Nov-12Seminar in Information Markets, TAU1

2 Outline Scoring Rules Market Scoring Rules Logarithmic Market Scoring Rule(LMSR) Distribution == Cost function Combinatorial Markets 07-Nov-12Seminar in Information Markets, TAU2

3 Event 07-Nov-12Seminar in Information Markets, TAU3

4 Scoring Rule 07-Nov-12Seminar in Information Markets, TAU4

5 Exercise 07-Nov-12Seminar in Information Markets, TAU5

6 Exercise 07-Nov-12Seminar in Information Markets, TAU6

7 Logarithmic Scoring Rule 07-Nov-12Seminar in Information Markets, TAU7

8 Logarithmic Scoring Rule 07-Nov-12Seminar in Information Markets, TAU8

9 LSR is local 07-Nov-12Seminar in Information Markets, TAU9

10 Properness - simple case proof 07-Nov-12Seminar in Information Markets, TAU10

11 Objective We want multiple agents(traders) to share their beliefs – Without paying each one – We want a single(unified) prediction. One option is a standard market(Double auction information markets) – What happens in thin markets? 07-Nov-12Seminar in Information Markets, TAU11

12 Market Scoring Rule 07-Nov-12Seminar in Information Markets, TAU12

13 Market Scoring Rule(2) Market maker subsidizes the reward for accurate predictions: – Gives incentive to participate and share your knowledge – Increases liquidity – Easy to expand to multiple outcomes 07-Nov-12Seminar in Information Markets, TAU13

14 Market Scoring Rule(3) If only one agent participates, it is equivalent to simple scoring rule. If many agents participate, it gives the same effect of a standard information market, at the cost of the payment to the last agent. 07-Nov-12Seminar in Information Markets, TAU14

15 Logarithmic Market Scoring Rule (LMSR) 07-Nov-12Seminar in Information Markets, TAU15

16 07-Nov-12Seminar in Information Markets, TAU16

17 how do we implement a market? 07-Nov-12Seminar in Information Markets, TAU17

18 Distribution is equal to Buying and Selling shares 07-Nov-12Seminar in Information Markets, TAU18

19 LMSR price function 07-Nov-12Seminar in Information Markets, TAU19

20 LMSR price function(2) 07-Nov-12Seminar in Information Markets, TAU20

21 LMSR cost function 07-Nov-12Seminar in Information Markets, TAU21

22 “How much?” 07-Nov-12Seminar in Information Markets, TAU22

23 Equivalence proof 07-Nov-12Seminar in Information Markets, TAU23

24 Example 07-Nov-12Seminar in Information Markets, TAU24

25 07-Nov-12Seminar in Information Markets, TAU25

26 07-Nov-12Seminar in Information Markets, TAU26

27 Combinatorial Markets 07-Nov-12Seminar in Information Markets, TAU27

28 LMSR local inference rule 07-Nov-12Seminar in Information Markets, TAU28

29 Combinatorial Product Space 07-Nov-12Seminar in Information Markets, TAU29

30 THANK YOU 07-Nov-12Seminar in Information Markets, TAU30


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