ExtZy is a prediction market game created by Z/Yen, which makes a market out of web-pages. Players can buy shares in those sites that they think will grow in popularity, and then trade their dividends in for real prizes.
Tricks of the Trading – ExtZy for Kids
ExtZy is Z/Yen’s prediction market system. Since 1999, we have used ExtZy in a variety of ways, as a tool for making crowd decisions (“the wisdom of crowds”), as a playpen for trading ideas (Avatars), and as a fun game for the Z/Yen CommunityZ. Originally invented, and later patented, for a large media company as a market for music, sports, fashion, and other items of interest for young people, during the 2000’s the primary markets for CommunityZ members became countries-at-risk and technological-futures. Our staff, mad about cricket, made cricket team news the dominant internal Z/Yen game. We have provided deeper analysis of the market, including work by Xueyi as a UCL MSc student before she joined Z/Yen.
We have always been interested in exploring ways of using ExtZy with clients from creating a market in research & development projects to helping construction contractors work together on quality and timing for multiple projects. Thus, we were delighted when some of the Chartered Institute for Securities & Investment (CISI) players approached us. The CISI were looking for a stock market game which would provide a longer-term view for investing that would appeal to school students studying towards CISI qualifications. Together we created “CISI Exchange”, aka CISIext, a bespoke version of ExtZy, for GCSE, AS, and A-level students. The game offers players the chance to build up and manage a portfolio of shares, but with a difference. Instead of buying and selling company stocks, players buy and sell shares in countries, Premier League football clubs, and a selection of up-and-coming music artists. Each stock represents a relevant website or search term. Dividends on the shares are calculated via unique visitor statistics for each site. The higher the number of unique web hits, the higher the dividends paid out each week on an entity’s shares. Apart from being a bit of fun, the game helps students to understand how markets work and illustrates the importance of popularity and perception on share prices.
The first CISIext game ran in autumn 2014 and was split into three game periods coinciding with school term times. Over 100 students at five UK educational institutions regularly played the game, with CISI students in Sri Lanka also getting involved. The countries market proved to be the most attractive for investors, with students quickly picking up on evolving problems in the Eurozone as shares in France and Germany became popular options for players. Players also looked to Russia as tensions with the Ukraine escalated. Even in the football market, players spotted that there was value to be had investing their hard earned points in West Ham, as the club had an unforeseen good run in the Premier League.
CISIext also had its own LIBOR/FX/spoofing/insider-trading scandal when two players were restricted from trading following a breach of market regulations. Rather creatively, they had created duplicate accounts to cross-sell shares at overly inflated prices - good lessons for the students of the importance of clear rules backed by surveillance, regulation, integrity, and ethics.
The autumn 2014 winner was Danny Mcintyre, a student studying the Level 2 Award in Fundamentals of Financial Services at Victoria College in Jersey. Danny achieved a net worth of 11,857 points, over 8,000 more than the second-placed student. Danny was presented with an iPad for his efforts by Jersey Committee President Paul Clifford and the Committee’s Student Liaison Officer, Eliff Carr. Danny felt that he had benefited from “staying one step ahead of the competition” by relentlessly searching the market for low value shares where other players had not spotted their potential.
The CISI Exchange has also been used as part of a three-day employer insight event for sixty students, organised by Investment 2020 and hosted by three firms in London. Students used the game to develop their knowledge of basic investment strategies, culminating in groups presenting strategies they utilised while playing the game. All-in-all, we are delighted to be supporting CISI’s fantastic outreach programme to students and together share our tricks of the trade to further financial literacy in a fun way.
This year was particularly exciting as CISIext, a bespoke educational version of ExtZy, was created for the Chartered Institute for Securities & Investment (CISI) to help students understand how markets work. Though the students were offered sports and music markets, interestingly the countries market also proved to be the most attractive and foreseeable market for students. We are currently enhancing the game for another educational run this autumn. We hope to explore the world and ExtZy with you a bit more in 2015! To read more: http://www.extzy.net/community/newsarchive/147-extzy-overview-2014
ExtZy, along with other prediction markets, can help predict sentiment. So far, our ExtZy experiment does not seem to be releasing ‘hidden knowledge’, e.g. about North Korea. However it does seem to help predict when there is a state change in sentiment, i.e. when a news event, such as Snowden or Egyptian unrest, is likely to persist.
We are keen to motivate our traders to be more participative and 'aggressive'. ExtZy players can now have ‘negative dividends’, i.e. losses, on their holdings, so they should trade more frequently. Looking forward to learning more in 2015! To read more:
The world is a busy place. ExtZy’s “Countries” Market is a marketplace where players buy and sell shares which pay dividends based on a country’s web mentions, as calculated by search engines each week. Each share has a price and dividend earnings. Thus the price/earnings ratio (P/E) of countries in such a market is an indicator of whether or not players predict a higher than normal rate of mentions (high P/E) looking forward, or a lower than normal rate of mentions (low P/E) looking forward. ExtZy players get their news from similar sources and are unlikely to have private knowledge. Even if they had private knowledge of major events, it would be immodest to suggest that they run to ExtZy to trade.
Players successfully predicted sustained upturns in UK (Jubilee and Olympics) news and US (presidential elections). Players were unsuccessful in guessing future Chinese dividends (leadership change). Other markets where players had moderate predictive success in determining new levels were Spain (banking crisis), Greece (economic crisis fatigue) and Egypt (regime change). The Countries Market does seem to be able to determine when news will rise to a new level and ‘hold’, or drop to a new level. To read more http://www.extzy.net/index.php?option=com_content&view=article&id=142:extzy-2012-the-world-in-review&catid=39&Itemid=91 We look forward to looking back in 2014.