Is it a good idea to encourage ALL employees to trade in these markets? Should insiders and/or highly uninformed people be allowed to trade? Do they help or hurt the market?
Yes, it is. These markets rely on network effects. More users lead to greater accuracy and will also provide more liquidity in the market. At worst, the outliers in the user base (uninformed and insiders) will cancel each other out. That is assuming that it is still an anonymous system. However, there might be problems in an open, more social system. People would ignore the outsiders and would all follow the lead of the insiders, which would definitely skew the results.
Thursday, April 23, 2009
Thursday, April 9, 2009
LinkedIn Case
Online social networks have become ubiquitous in the past few years. What forms of value do users get from these services and who is most likely to sign up on LinkedIn versus other sites?
The primary value that users get from online social networks is simple communication with persistence and a broad reach. With social networking sites, a user can simply post a thought, message, picture, video, etc, and all of their friends can see it. While emailing or making phone calls is not particularly difficult, posting on your wall is even easier. This ease of communication, though not necessarily as thorough, helps keep more people in regular contact. This persistent contact can strengthen relationships that could otherwise become stagnant due to a lack of communication. This is also aided by the ease of reciprocation between friends. Social networking sites become even more powerful as the network effects grow. I for one was initially resistant to joining Facebook. But once I did, I found a lot of my old high school and college friends, as well as old work associates. It seems like I find another one every week at least. The network effects are getting stronger- Facebook just announced that it has reached 200 million members. LinkedIn is an online social networking site that focuses on building business and work relationships. It does not have many frills like the games that can be played on other purely social networking sites. The users of LinkedIn post work related information like work experience, expertise, work recommendations, and can make connections with people that are linked to their profile in a professional context.
The primary value that users get from online social networks is simple communication with persistence and a broad reach. With social networking sites, a user can simply post a thought, message, picture, video, etc, and all of their friends can see it. While emailing or making phone calls is not particularly difficult, posting on your wall is even easier. This ease of communication, though not necessarily as thorough, helps keep more people in regular contact. This persistent contact can strengthen relationships that could otherwise become stagnant due to a lack of communication. This is also aided by the ease of reciprocation between friends. Social networking sites become even more powerful as the network effects grow. I for one was initially resistant to joining Facebook. But once I did, I found a lot of my old high school and college friends, as well as old work associates. It seems like I find another one every week at least. The network effects are getting stronger- Facebook just announced that it has reached 200 million members. LinkedIn is an online social networking site that focuses on building business and work relationships. It does not have many frills like the games that can be played on other purely social networking sites. The users of LinkedIn post work related information like work experience, expertise, work recommendations, and can make connections with people that are linked to their profile in a professional context.
Thursday, April 2, 2009
Wikipedia
How do Wikipedia’s processes for creating and modifying articles ever lead to high-quality results?
The key to Wikipedia’s success for creating and modifying articles lies in its open architecture; that is, any internet user can modify articles. This also leads to the incredible diversity of articles that are contained on the website. Any user could start an article on any topic that was of interest to them. These articles started as “stubs” that could be expanded upon by any user- particularly those who were subject matter experts in that area who had a vested interest that the information was correct. These experts ranged from academics and professionals, to average people with various interests and hobbies. For this reason, you can find Wikipedia articles on subject traditionally found in an encyclopedia like religion and science, to more pedestrian subjects like movies, television shows, comic books, etc. As the mass of content grew bigger it attracted more users. More users brought with them more scrutiny for the articles and therefore more editing and accuracy. I for one was skeptical when I first learned of Wikipedia, but over time have come to trust it as a valuable source of information. Most articles are heavily footnoted with credible references as well as links to more “official” websites, all of which aid in verification. Another feature that leads to high quality results is the linking of articles to other related ones on Wikipedia. Personally, I have been sucked into the webpage for long periods of time moving from one link to another, particularly when looking at the many “lists” that Wikipedia can generate and link to- and this goes for almost any topic.
The key to Wikipedia’s success for creating and modifying articles lies in its open architecture; that is, any internet user can modify articles. This also leads to the incredible diversity of articles that are contained on the website. Any user could start an article on any topic that was of interest to them. These articles started as “stubs” that could be expanded upon by any user- particularly those who were subject matter experts in that area who had a vested interest that the information was correct. These experts ranged from academics and professionals, to average people with various interests and hobbies. For this reason, you can find Wikipedia articles on subject traditionally found in an encyclopedia like religion and science, to more pedestrian subjects like movies, television shows, comic books, etc. As the mass of content grew bigger it attracted more users. More users brought with them more scrutiny for the articles and therefore more editing and accuracy. I for one was skeptical when I first learned of Wikipedia, but over time have come to trust it as a valuable source of information. Most articles are heavily footnoted with credible references as well as links to more “official” websites, all of which aid in verification. Another feature that leads to high quality results is the linking of articles to other related ones on Wikipedia. Personally, I have been sucked into the webpage for long periods of time moving from one link to another, particularly when looking at the many “lists” that Wikipedia can generate and link to- and this goes for almost any topic.
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