Ups and downs for Nobel Bourse

Champagne corks might have been popping last night in New York and Seattle, home base for the winners of the 2004 Nobel Prize in Physiology or Medicine, but there were no celebrations for the German team who run the Nobel Prize Bourse, an Internet-based virtual stock market designed to predict prize winners. Around midday on Monday (October 4) in Europe, Richard Axel, of the Howard Hughes Medical Institute and Columbia University in New York, and Linda B. Buck, of the Fred Hutchinson Cancer Research Center in Seattle, were named winners of the 2004 Nobel Prize in Medicine for their work on olfactory reception. But Axel and Buck had not been suggested as possible winners by any of the participants of the Nobel Prize Bourse, according to Christoph Kepper, an e-commerce doctoral student at Johann Wolfgang Goethe University in Frankfurt, who manages technical aspects of the Bourse's Web site. "It's disappointing. We wanted to get it right," Kepper told The Scientist Monday afternoon. Still, there was good news to come. All three winners for the Physics prize—David J. Gross, H. David Politzer, and Frank Wilczek—were traded on the Nobel Prize market. On Tuesday afternoon Kepper told The Scientist : "It's proof that the concept at least works. This is really good for us after yesterday, when we did not even have a clue who should be on the list." The three Physics Nobel Prize winners on the virtual market list had been ranked in the 6th, 8th, and 10th positions, far behind the frontrunner Anton Zeilinger of the University of Vienna. Kepper conceded that he and his colleagues would like the Nobel Bourse frontrunner to win the actual prize in at least one of the remaining categories. "That would be perfection," he said. Under trading rules, every participant receives an initial (virtual) cash deposit of $10,000 that can be used for buying and selling the stocks of potential Nobel Prize winners, who are suggested by participants. The initial price for stocks in the pre–initial public offering (IPO) period is $10 per share. If, in a period of 2 weeks, traders buy 5000 shares of a stock at $10 per share for a total investment of $50,000, then an IPO of the stock will launched and the price will fluctuate according to supply and demand. Trading on a prize ceases at 6 pm on the day before the announcement. Kepper said that as of Monday afternoon, about 880 people were participating in the Nobel Prize Bourse. Of those, about 165 had signed up requesting to participate in English. Some 302 "legitimate candidates" had been suggested for all six categories, with Mickey Mouse and other nonserious candidates thrown out, Kepper said. To determine whether a suggested candidate is legitimate, the project team does a background check on the candidate on Google, Kepper said. Of the 302 legitimate candidates, 99 successfully achieved IPO status. The Nobel Prize Bourse is the brainchild of Bernd Skiera, chairman of the Electronic Commerce Department at Frankfurt University. Skiera told The Scientist that usually a virtual stock market, or VSM, trades items with a known numerical quantity, such as five movies nominated for a Best Picture Academy Award or three candidates running for a political office. But he wanted to take the concept a step further by creating a virtual market in which the number of traded items—or people—is not known. Because Nobel Prize selection committees never publicly announce potential candidates, Skiera decided that a virtual Nobel Prize market trading potential winners would be perfect for his research. "We thought this would be a very nice project to work on, and might bring a bit more transparency into the Nobel Prize selection process," he said. The Nobel Prize Bourse Web site went online September 1 in the German language, Skiera said. Due to requests from outside of Germany, English language pages were added 9 days later. Skiera said the German Research Foundation has contributed to the project by funding two half-time, 2-year positions for the project team, including the position held by Web site technical manager Kepper. The daily Frankfurter Allgemeine Zeitung newspaper has provided written profiles of candidates being traded. IBM Germany has donated a notebook computer. In addition, E-Finance Lab, which helped develop the Web site, donated five Apple iPod digital music players to be awarded to winning Nobel Prize Bourse participants. Both Skiera and Kepper said this year's Nobel Prize Bourse had been a learning process and that a new, improved version would be launched next year for 2005 prizes. Skiera quipped: "We were running behind schedule this year, but unfortunately could not ask the [Nobel Prize] committee to postpone the selection process a few weeks." As of Tuesday morning, the top performers in the Chemistry Prize—due to be announced Wednesday—were Kyriakos Nicolaou, George Whitesides, and Albert Eschenmoser.

Ups and downs for Nobel Bourse

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