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PRINCETON, N.J., March 21 (LocalBusiness.com) -- Internet games are for real when it comes to forecasting the outcome of actual events, researchers at a think tank connected to NEC Corp. say.
Findings by scientists at NEC Research Institute suggest that games set up for fun on the Web could become the next big proving grounds for business ideas of all types, artificial markets that capture the attention of the most savvy consumers of everything from movies to physics.
"I've been interested in the predictive power of real markets, the ability of real markets to incorporate information," NEC research scientist David Pennock told LocalBusiness.com. "I saw these fairly realistic-looking games on the Internet and wanted to see if they behave like real markets."
They did, Pennock and his team found, after assessing the accuracy of two very different artificial betting parlors on the Web.
Place your bets
Foresight Exchange hands out play money to scientific types whose idea of a good time is placing a bet on the chances that physicists will discover a subatomic particle called the Higgs boson by the year 2005.
Players in both games were able to call the winnners, NEC researchers found.
In the Hollywood game, nominees where the bets were priced at H$10 (ten Hollywood dollars) won twice as many awards as entertainers who drew the H$5 bets.
As good as experts or better
Those who placed their FX dollar bets on the Foresight Exchange were no less accurate, even if the betting is a little more mathematically demanding on the Website, which draws the Ph.D. crowd.
When bettors priced the chances of given outcomes in the scientific community at 0.2, or 20 percent, the outcomes did occur about one in five times.
Pennock said NEC Researchers picked the Hollywood Stock Exchange because its popularity made it a good test subject.
The Foresight Exchange, he admitted, is a Website where he has followed the action for some time.
"The natural drive to compete is, if not quite as strong as the drive to earn a profit, still strong enough so that people do their best and reveal a good deal of information," the researcher said.
Setting up an artificial game on the Internet is much less costly than, for example, hosting a series of focus groups to get consumer views, he added.
"If you have a niche area that you want to explore, it can be hard to find people who are knowledgeable and interested," Pennock said. "If you set it up on the Internet, they can find you."
A giant that chalked up $48 billion in revenue last year, NEC Corp. (Nasdaq: NIPNY) funds about 70 researchers and 30 staffers at the Princeton-based think tank.
Joining Pennock on the games study were Steve Lawrence, C. Lee Giles and Finn Arup Nielsen.
Oh, and the chances that the Higgs boson particle will show up by 2005 are rated at 77 percent.
Peg Brickley covers Philadelphia for LocalBusiness.com. E-mail her with story ideas or comments.
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