The Impact of Software for Running Electronic Information Markets (Author: Naeem Sherwani)

1. Now days, the notion of electronic information markets is gaining popularity due to some unique characteristics. These markets work differently than the traditional markets. The integration of technological advancements in markets has changed the nature of information gathering about new products successes forecasting Gruca, Berg and Cipriano (2003).
2. They cite in their research Urban and Hauser (1993) have stated that it is not expensive in terms of money and time to gather information from consumers.
3. Another revolution can be seen in the changes of internet. It is surprisingly developed from a means of communication to a means of exchange.
4. In this way, a number of electronic markets have come up to play their roles in electronic information markets. Gruca, Berg and Cipriano (2003) explain the features of trading sites.
5. These sites may be like ebay.com and Chemdex.com. These are much more than electronic versions of traditional retailers. These sites can create and expand markets by bringing buyers and sellers together around the world any time day or night.
6. In terms of gathering information for example about the product success forecast may lead to benefit an organization to save time and money. In addition, it is the fastest and efficient way to gather information from participants regardless of regional boundaries.
7. Therefore, the development of research on asset markets to access a pool of information provides an evidence of an efficient way of gathering information from interaction among the traders at a large scale. It is also evidenced that through mechanism of prices, all traders in a market (and even an observer) can come to share and synthesis information held by each and everyone.
8. There are a variety of information markets. Some deal with real money while others use artificial money that can be traded in for prizes. It is important to notice that participants can bet at the Foresight Exchange (www.ideosphere.com) on the outcomes of nearly every conceivable event in categories including news, politics, arts entertainments, finance, religion, disasters and science and technology.
9. The information market called The NewsFuture Market (us.newsfutures.com) that offers betting on a variety of events related to politics, economics, science, etc. In the field of films and movie stars, The Hollywood Stock Exchange (www.hsx.com) offers people to bet on the fortunes of film and other movie stars.
10. The forecasts in this market are more accurate to opening week end revenues of major movies. This information is more reliable as compared to the movie industry’s official forecasts. There are many more markets like TradeSports (www.tradesports.com) and the Atheletic Stock Exchange(www.athleticstockexchange.com)
1. Ray (2004) describes that the aim of all these sites is to disseminate information as per interest groups.
11. However, these markets are the byproduct of technology-web-based event markets. Most of the companies provide a range of trading and gambling services, such as Tradespoerts.com, betfair.com and pseudo-markets (in which participants trade virtual currency, Newsfutures.com and ideosphere.com.
12. These websites define the contracts and then allow the participants to post their offers and to accept the offer of others. These markets have gained successes in making accurate predictions and also performed large scale polling organizations. In all these situations, technology is the backbone to run these markets.
13. Russ Ray argues (2004), “The probabilities in these markets continually reflect the collected wisdom of knowledgeable experts and savvy insiders. These markets exist only in cyberspace; the prices of claims in these markets are mostly immune to government regulations, political pressure monopoly pricing and other factors that routinely affect the prices in financial and commodity markets, keeping the probabilities in these markets pure.”
14. It is important to note that the idea of prediction market dates back to 1600s (Ray 2004). At the start of new millennium, the software technology has turned its face in electronic information markets. Software capability is a strategic source of market differentiation in many industries, from healthcare to financial services (Greg Goth.).
15. Due to diversity and accessibility of traders, the mechanism of electronic information markets is full of dualities. On the one hand, it is simple for the observer, trader or student to get into the market. It is more simplified and does not require special qualification for participation. It is cumbersome mechanism due to budgetary pressure and use of highly sophisticated technology on the other hand. It has become imperative for electronic information markets to have access to software technology. The role of software in electronic information markets is crucial from sellers to buyers, traders to decision-makers; whether it is Hewlett and Packers, or Iowa Electronic Markets or NewsFuture. If they have to create and expand the prediction market, then they need to run their system. Here software play indispensable role to reach some conclusions. It is critical for the researchers, software developers, and users to have basic understand of its role in information markets to answer the following questions*
1. 1. What are the different kinds of software for electronic information markets?
2. 2. What changes have occurred in the functions of software to run electronic information markets?