Market managers, IMHO, should get free inklings for creating interesting public markets. The inklings they are paid can be proportional to the number of traders in their market, for example, if my market had 25 traders, maybe I get paid 25 * 100 = 2500 inkings. This would keep the markets interesting, get more traffic for inkingmarkets and make it more fun to create markets (since insider trading is not allowed).

What do you guys think?

Yeah, we’ve talked a lot about this – there’s lots of things we could give away inkles for: referring people, making markets, etc. the only reason we haven’t done it is because it artificially gives people more “market sway” based on activities they do on inkling vs. their trading prowess. maybe this isn’t a big deal, maybe it is.

maybe you could earn some other type of points that would be good towards something else, although at this stage of the game given our size i highly doubt we’d have much leverage with any airline or major credit card to negotiate a deal where 1 inkle = 1 united airline mile. :) thoughts?

Adam,

I emailed you a while back about me making sports markets for you. I am wondering if you have come up with a solution for that, that would enable me to do this. Ill check back to see your response.

I was also thinking that market makers should be rewarded some way, because setting a market usually involves quite a bit of research.
Especially with the frustrating prohibition to trade on your own markets (which usually touch at things that interest you). ;)

I haven’t yet thought of a satisfying solution, though.

Here’s my suggestion, determine an appropriate level of:

New Money / User / Market.

Here’s the thought, these are not double sided transactions, so every winner doesn’t have a loser. If you established what the “tolerable” influx of new money to the system was then you could use the market making mechanism to enforce that… Here’s my thinking…

You determine that $100, per user per market is the appropriate level. I create a market that has 50 users in it. If (because of my initial pricing) the market generates LESS than 5000 inkles then I get the extra. If it generates MORE than 5000 inkles then I LOSE the difference. That would incentivize proper initial pricing (vs. just taking the easy way out and dividing by the number of possibilities and treating them all evenly).

As a suggestion, I would start with $200 per user, per market with private markets excluded (I think private market money shouldn’t even go into your balances but that’s neither here nor there).

Inkling could charge a small transaction fee in Inklings, and split it with the market manager. This would also, in a small way, absorb some of the inklings which otherwise flow into the system for every new account created.

Alternately, you could create a “Top Managers” board which rates managers by the volume traded on markets they create. Maybe this idea would result in too many people trying to create obvious markets (World Series, Superbowl, etc., all stuff that has been done before), and not enough thought into trying new things. But it seems like a relatively cheap “reward system” for creative managers, and may stimulate efforts to produce interesting markets.

Eino is making a very good point: because managers can’t trade in their markets, they have a serious incentive not to open the markets they would be most interested in (and therefore probably run best).

Clearly we can’t have managers trade in their own markets today, but we might be able to come up with some rules that would let them do so fairly. For instance, what if they could trade in their markets after 48 hours and a certain (relatively high) volume? What if they could trade as they pleased but all their trades were public and open to complaint?

In any case, I like laxrulz777 and onemike’s ideas.

I agree with laxrulz777 that there should be some incentive for the market maker to set good initial prices. I’m no stock market expert, but it would seem natural to combine a disincentive for setting prices poorly (money generated by the market comes out of their account) with an incentive for making good markets (a transaction fee). There would have to be a way for the market maker to limit the number of shares they bought or sold. If the market maker set the prices poorly, and the market hit the limit, trading would most likely stop short, ending the transaction fees. Something like that, anyway.