NP Markets, or How To Get Everyone Else to Solve Your Intractable Problems

I discuss the prospects of opening securities markets in hard computational problems, including satisfiability , counting problems, and Bayesian inference problems. Such NP markets would offer direct monetary incentives for the development of better algorithms. Market prices would serve as collective approximate solutions, and bid-ask spreads may reflect problem difficulty . Some markets offer controlled settings for investigating the speed of information incorporation in markets, and exploring evidence of bounded rationality and imprecise subjective probabilities among market participants.

[1]  Winston C. Yang,et al.  Parimutuel betting markets as information aggregation devices: experimental results , 2003 .

[2]  David M. Pennock,et al.  The Real Power of Artificial Markets , 2001, Science.

[3]  Michael P. Wellman,et al.  Compact Securities Markets for Pareto Optimal Reallocation of Risk , 2000, UAI.

[4]  David M. Pennock,et al.  The Power of Play: Efficiency and Forecast Accuracy in Web Market Games , 2000 .

[5]  Thomas A. Rietz,et al.  Wishes, expectations and actions: a survey on price formation in election stock markets , 1999 .

[6]  Paula J. Brewer.  Decentralized computation procurement and computational robustness in a smart market , 1999 .

[7]  N. Nisan,et al.  The POPCORN market—an online market for computational resources , 1998, ICE '98.

[8]  J. Gandar,et al.  Informed Traders and Price Variations in the Betting Market for Professional Basketball Games , 1998 .

[9]  Baruch Awerbuch,et al.  The Java Market: Transforming the Internet into a Metacomputer , 1998 .

[10]  Michael P. Wellman,et al.  Representing Aggregate Belief through the Competitive Equilibrium of a Securities Market , 1997, UAI.

[11]  P. Garcia,et al.  Recovering probabilistic information from option markets: Tests of distributional assumptions , 1996 .

[12]  R. Hanson.  Could gambling save science? Encouraging an honest consensus , 1995 .

[13]  Robert Forsythe,et al.  Anatomy of an Experimental Political Stock Market , 1992 .

[14]  Gregory F. Cooper,et al.  The Computational Complexity of Probabilistic Inference Using Bayesian Belief Networks , 1990, Artif. Intell..

[15]  Russell J. Lundholm,et al.  Information Aggregation in an Experimental Market. , 1990 .

[16]  C. Plott,et al.  Rational Expectations and the Aggregation of Diverse Information in Laboratory Security Markets , 1988 .

[17]  R. Thaler,et al.  Anomalies Parimutuel Betting Markets: Racetracks and Lotteries , 1988 .

[18]  H. Varian.  The Arbitrage Principle in Financial Economics , 1987 .

[19]  C. Plott,et al.  Efficiency of Experimental Security Markets with Insider Information: An Application of Rational-Expectations Models , 1982, Journal of Political Economy.

[20]  Sanford J. Grossman.  An Introduction to the Theory of Rational Expectations Under Asymmetric Information , 1981 .

[21]  R. Lucas.  Expectations and the neutrality of money , 1972 .

[22]  Jacques H. Dreze,et al.  Market allocation under uncertainty , 1970 .

[23]  Martin L. Weitzman,et al.  Utility Analysis and Group Behavior: An Empirical Study , 1965, Journal of Political Economy.

[24]  K. Arrow.  The Role of Securities in the Optimal Allocation of Risk-bearing , 1964 .

[25]  A. M. Turing,et al.  Computing Machinery and Intelligence , 1950, The Philosophy of Artificial Intelligence.