Form+Substance

Brokers on cost management make use of knowledge based practices and ontology based tools

2006-07-17T18:04:00.000+02:00

My paper Brokers on cost management make use of knowledge based practices and ontology based tools, co-authored with Roberta Cuel, Roberto Biscaro and Paolo Collini has been accepted for publication, and will be presented at IMP 2006 (22nd Industrial Merketers and Purchasers) conference, held in Milan, Italy, on 7-9 September.

The purpose of this paper is to demonstrate how consultancy firms on cost management often play the crucial role of brokers among organizations (buyers and suppliers). The analysis has been carried on within an Italian consulting company, and has been aimed at understanding: (i) how consultants on reduction costs manage their knowledge in order to produce effective value from their activities; (ii) how consultants play the role of brokers between buyers and suppliers, and enable product or process innovation; (iii) how semantic based technologies can help consultants and organizations to effectively manage purchasing data and costs.
The work has been based on two different activities: (i) an ethnographic study, and a series of interviews aimed at understanding knowledge management processes (according to the Weick’s sensemaking approach (1995)) between the consultancy firm and its clients; (ii) the investigation of semantic based tools developed within the consultancy firm. These tools are used to manage knowledge about costs and purchasing processes, and their implementation implies some technological and organizational consequences.
We demonstrate that theoretical approaches on cost management can be improved by a knowledge management approach, such as the sensemaking framework. This one becomes much more relevant when cost management activities are developed in outsourcing processes, when distinct organizational perspectives and cultures encounter, and finally when information asymmetries arise. We also explain, how consultants allow the encountering of various perspectives, forcing purchaser officers to look for more suitable, innovative, and less expensive solutions. Finally, the analysis of semantic based technologies illustrates how the industry of cost management is evolving and how innovative solutions enable purchaser officers to effectively manage knowledge, identifying and buying more suitable and less expensive products or services.

Virtual worlds, real economies

2006-04-24T22:23:00.000+02:00

Some new pointers to one of my favourite topics.
BusinessWeek has an interview with Edward Castronova on the economies of virtual words. Here are some highlights:

I thought it was a fake economy. I found out that it really didn't feel fake at all. When I saw how it connected to the real economy, as you can see clearly in Second Life with its translation of Linden dollars into real dollars, and then you imagine how big this phenomenon could get, it started to have real-world macroeconomic implications.

[Second Life virtual world] It's an infinitely scalable content creator's dream. It's an extension of the land mass of the Earth. As long as somebody wants land to build on, Second Life will make land. If you're into creating content -- whether it's a building or a logo, anything -- it's just a dream space. That's what explains how it's growing.

This month's Wired (guest-edited by The Sims' creator Will Wright) has an article that suggests how virtual world are going to coalesce in a few years.

Within a decade, then, the notion of separate game worlds will probably seem like a quaint artifact of the frontier days of virtual reality. You'll still be able to engage in radically different experiences - from slaying orcs to cybersex - but they'll occur within a common architecture. The question is whether the underpinnings of this unified metaverse will be a proprietary product, like Windows, or an inclusive, open standard, like email and the Web. (The Open Source Metaverse Project is currently working on such a nonproprietary platform.)

But the most interesting news, from my perspective, is from Grand Text Auto, which reports from UCI’s Massive gathering:

One of the more intriguing things I’ve heard so far is about some developments in Second Life. They’re building an API into the system. It sounds like it might just be for pulling live data out of Second Life for use elsewhere, but my hope is that it will be possible to structure and control elements of Second Life via external processes (e.g., characters controlled by AI running outside Second Life’s scripting system). Similarly, they’re working toward an open source viewer that they imagine being customized by different communities. These might both open up interesting possibilities for researchers and artists.

Second Life has always been on the techno-social forefront in experimenting ideas on virtual words. Allowing programmatic access via an API is a major step forward, that is going to enable umprecedented possibilities. It also poses a lot of difficult challanges, so I'm really curious to see how the whole thing will be implemented.

See also: my older post Speculative finance and crafting in virtual worlds.

Formal Ontologies Meets Industry 2006

2006-04-21T17:43:00.000+02:00

The Call For Papers for the second edition of the Formal Ontology Meets Industry (FOMI) workshop has been published. This year, the workshop will be held in Trento, Italy, on December 14-15.
The list of topics of interest is quite broad; as a member of the Program Committee, I'm specifically interested in the 'ontology evaluation' and 'ontology changes and developments within organizations' areas.

With the application of new methodologies and techniques in the everyday practice and the accessibility of new theoretical results in this area, developing new tools based on more sophisticated frameworks has become a common need. This is an important reason for the increasing interest in the employment of formal ontologies in fields like medicine, engineering, financial and legal systems, and other business practices. In all these fields, a new emerging trend is to evaluate the interdependencies between theories and methods of formal ontology and the activities, processes, and needs of enterprise organizations.

Topics of interest include (but are not limited to):
ontology methodologies in business practice;
ontologies and corporate knowledge;
ontologies adaptation within organizations;
formalization of the know-how;
representation of artifacts and design;
representation of functionalities;
representation of knowledge and business processes;
linguistic representation in organizational knowledge;
linguistic problems in organizational standard code and codification processes;
enterprise modeling;
ontology evaluation;
ontology effectiveness;
ontology changes and developments within organizations;
representation of business services;
ontologies and electronic catalogs;
ontologies and e-commerce;
ontologies and marketing;
ontologies in the practice of engineering;
ontologies in the practice of medical sciences;
ontologies in finance;
ontologies and e-government.

Real-Life Knowledge Management

2006-04-12T12:31:00.000+02:00

Roberta is one of the authors of Real-Life Knowledge Management: Lessons from the Field, a new book from KnowledgeBoard. The book can be downloaded for free.

Folksonomies and Ontologies: a false dichotomy?

2006-02-14T13:43:00.000+01:00

Danny Ayers calls the relationship between tags and formal systems a false dichotomy:

Tagging terms are are only imprecise when you throw away the contextual information - i.e. who did the tagging and when. This information can be captured transparently to the user (and is, by tools like del.icio.us).

I'm not sure I fully agree, however I for sure disagree with Clay Shirky's classical piece on this theme (some details on my opinion can be found in this post).

An interesting way to add more structure to social (bottom-up) tagging systems, is to provide a feature that allows users to organize tags in a (socially defined) hierarchical (multi-)taxonomy, such as Wikipedia's category system. I find it astonishing how (globally) accurate and complete this structure has become.

The Future of Web Apps

2006-02-13T21:58:00.000+01:00

Interesting slides from Tom Coates of PlasticBag on The Future of Web Apps.

Look to add value to the Aggregate Web of data
Build for normal users, developers and machines
Start designing with data, not with pages
Identify your first order objects and make them addressable
Use readable, reliable and hackable URLs
Correlate with external identifier schemes
Build list views and batch manipulation interfaces
Create parallel data services using standards
Make your data as discoverable as possible

REST-based web services ("readable, reliable and hackable URLs" + "Build for normal users, developers and machines") form a sort of lightweighted (RDF-free) semantic web.

Clay Shirky on Ontologies and Folksonomies

2005-12-16T14:11:00.000+01:00

I don't agree with Clay Shirky's article Ontology is Overrated: Categories, Links, and Tags.
In fact, what he founds to be shortcomings of ontologies are not only facts known since the foundation of the discipline itself (Aristotle, circa 300 BCE), but in fact the driving motivations of the study of knowledge representation.
Of course everyone's view of the world is subject to biases and prejudices. Biases are what makes knowledge possible (see Kant). (Shannon's) information is always "information about a difference". You have a difference when you notice that something is different than you expected. But... if you "expect" something, you have a bias, and a person with different biases sees different things. Categorizations are meaningful only because they are biased. Successful "knowledge representation" (think of mathematical and formal models, theories, etc.) are always highly biased: they are abstractions that throw away all the stuff that is irrelevant for the intended purpose.

By the way, in my work as a developer of software tools for knowledge management, I found that my customers are always highly biased, aware of their biases, and they want a highly biased information system - which is perfectly functional for them. Notice the different perpective: for Shirky biases are laughable defects (he makes fun of soviet catalogs based on marxism) whereas in my opinion biases are where knowledge is. No bias, no knowledge (this is an very old idea in philosophy).

Here comes the interesing point. The goal of ontologies is to make biases (or "definitions", or "intended meaning") explicit. To formally define them, in order to enable "communication". By the way, the problems outlined in the article are not only restricted to ontologies: they are, more radically, related to what linguists call "the illusion of communication". I'm writing this text "hoping" that we share the intented meaning of these words, and so you can understand what I'm saying; this is true only to a certain extent.
This perspective raises a lot of challenges, some of them are identified in the article, and they are part of the research programs dealing with formal ontologies.

By the way, for many KR/KM-related uses, Folksonomies are not the right tool. I'm not interested in having a thousand people tag a document as related to the topic X, if they do not agree on what X is. Ok, of course this might be just fine for del.icio.us, but if you want to trasfer your electronic clinical folder from Rome to Tokyo for performing surgery, you probabily would want to be sure that the differences between the two information systems are well understood at the meta-level... which is in fact the ontological level.

Ontology-driven Text Miningfor Cost Management Processes

2005-11-29T11:05:00.000+01:00

My paper "Ontology-driven Text Mining for Cost Management Processes", co-authored with Roberto Biscaro and Roberta Cuel has been accepted for pubblication, and will be presented at the SWAP 2005 (Semantic Web Application and Perspectives) Conference, held in Trento, Italy, on 14-15 December.

After introducing some basic notions about Cost Management processes and Spend Data Management practices, this paper describes a software system for the management and monitoring of enterprise purchase processes. The system enables corporate purchasers to query product catalogs written in natural language, by pre-analyzing them using text-mining techniques in order to build a structured representation of the purchasable items, based on a domain-specific ontological model. The ontology gives a simple but effective account of the notion of “functional equivalence” between items, which enables the software application to suggest to the users the most cost-effective item which satisfies their requirements.

Also, we will present another paper on a similar topic (but from a slightly different perspective, more oriented toward Economics rather than Computer Science) at iTAIS 2005 (Italian Association for Information Systems) Conference, held in Verona, Italy, on 1-2 December 2005.

Analyzing blog conversations

2005-11-24T11:27:00.000+01:00

An interesting post on tracking blog conversations, with a reference to an article by Anjo Anjewierden presented at the 2nd Workshop on Weblogging Ecosystems.
I agree with Matthew Hurst that

...conversation visualization is another way in which the blogosphere can potentially trump Web 1.0 with innovation in the search/browsing interface.

There are other intresting articles, also on the first edition of the workshop.

The Hidden Web, and how to crawl it

2005-10-21T01:12:00.000+02:00

Fact: general-purpose search engines, such as Google and Yahoo!, only index a small fraction of the information on the real web, about 1/500th.

Think of it this way: Google, considered by most people in the know to have the largest search database, has about eight billion pages in its index. Those eight billion pages seem like a lot until you consider that the Deep Web is estimated to be 500 times bigger than the searchable Web. Multiply 500 by the 8 billion in Google’s index… plus add in the fact that Google is only indexing a fraction of the searchable Web (around 250 billion pages are on the Web today)… and you’ll get a whole bunch of math that makes my head hurt. Suffice it to say that the Deep Web is worth looking into. [LifeHacker, citing About/WebSearch, which report some figures from BrightPlanet, a company specializing in KM solutions]

However, I don't agree with the common opinion that the hidden web is unreachable by search engines because it is voluntarily obscured, or protected by passwords or by the Robot Exclusion Standard.
The main reason is that general-purpose web crawlers (those used by mainstram search engines) can only read web pages as raw data, and the follow the links found in the text. This behaviour leads to two main practical barriers:

Links generated by executeable content: many links, expecially "navigational" links, that are often the only gateway to content pages, are not explicitely written in the text, but are generated on the client at runtime - usually by a script (or a flash or java applet), often triggered by a specific behaviour of the human user.
While embedding a full client-engine simulator in the crawler would be feasible, although unpratical (since executing arbitrary scripts for the sake of looking at what comes out can be very resource consuming, expecially if you are examining billions of pages), the idea of a crawler able to "guess" the possible interactions of an user with the interactive features of the page is totally out of reach.
Links generated from user-provided input: when links are created dynamically, using information provided by an user who fills an open-ended form, or issues a query using an open-ended search box, there is no way for a general-purpouse crawler to enumerate all the possible alternatives. While some online databases, such as Wikipedia and the Internet Movies Database solve this problem by providing static links for all the entries (such as Wikipedia's AllPages special page), in other cases, expecially when dealing with content which is dynamically generated, or changing very often (such as financial news services), the very approach of "indexing" content to enable search is inadequate.

During the past three years, I have spent some time developing (as a contractor) a domain-specific programming language for writing context-specific crawlers, and it occurred to me how difficult and compex the contecptually simple act of programmatically accessing a website has become. The problems described above can be solved locally (i.e. for each specific site) by modelling the site-specific patterns of interaction of a typical user, and replicating them using a scriptable client which generates a sequence of synthetic events.

And what is the long term, global solution to these problems, if building indexes is less and less a viable approach?
The answer is always the same: migrating from a web of human-targeted documents and interactive applications to a web of (semantically annotated) data and (semantically annotated) web services. That would enable a novel approach to search based on a federation of context-aware information providers, coordinated by search engines that analyze user queries and route/delegate them to more specific web services.
How, and when, this could became a reality across the industry is not clear right now: both the WS* standards, and the OWL/RDF specifications have until now failed to became widespread, probably because they appear too complex and not really useful; the Semantic Web is still a buzzword; the more economically sustainable "less is more" approach is still dominant (e.g. REST web services, XML-based languages, folksonomies).
However, the idea of programmatically accessible web sites is becoming more and more relevant: we have a lot of web services APIs, but no one cares to agree on the semantics, which is still hard-wired into the applications.

Also: Danny Ayers explores some alternatives to the Semantic Web.

Ontology editors become mainstream software products

2005-10-06T22:42:00.000+02:00

Today, Altova, the makers of the well known XML Spy editor, announced SemanticWorks 2006:

Altova SemanticWorks™ 2006 is the ground-breaking visual RDF/OWL editor from the creators of XMLSpy. Visually design Semantic Web instance documents, vocabularies, and ontologies then output them in either RDF/XML or N-triples formats. SemanticWorks™ 2006 makes the job easy with tabs for instances, properties, classes, etc., context-sensitive entry helpers, and automatic format checking. It is the sensible way to put the Semantic Web to work for you.

The product is visually very similar to the rest of the Altova suite, and come with a price tag of 199 Euros. Some considerations:

Semantic web products are crossing the academic research boundary, and starting to become mainstream across the industry. Until now, the only available ontology editors were those created by academic labs (such as Protégé and SWOOP), or those bundled with knowledge-management platforms (such as Autonomy's and Verity's).
'Ontologist' is becoming a real-world job title. Some of my friends works as ontologists in a private company, here in Italy.
I am not so sure that working with ontologies will be related to directly working at the OWL and RDF level. Those are complex, low level languages, and I expect that the users will be more interested in higher-level editors, that will produce OWL/RDF as an automated step of a more complex deployment process.

Managing the Meaning

2005-09-29T23:53:00.000+02:00

I wholeheartedly agree with David Heinemeier Hansson's opinion, on the fact that DBMS should only keep application data, and not business logic:

I consider stored procedures and constraints vile and reckless destroyers of coherence. No, Mr. Database, you can not have my business logic. Your procedural ambitions will bear no fruit and you'll have to pry that logic from my dead, cold object-oriented hands.

In other words, I want a single layer of cleverness: My domain model. Object-orientation is all about encapsulating clever. Letting it sieve half ways through to the database is a terrible violation of those fine intentions. And I want no part of it.

That said, there is still a lot of impedance between object-oriented and relational models, and the current generation of O/R mapping tools only partially fills the gap. On the other side, as Chris Date maintains, even SQL itself fails at implementing the relational model itself in a satisfactory way.

However, as for managing the meaning, I agree with the knowledge representation/knowledge management perspective, that an ontological layer should take care of providing a domain model, and give the correct semantics to the data, thus enabling automated interpretation and reasoning, without (paraphrasing DHH) "letting it sieve half ways through the application".
This is a noticeably more difficult goal, since both tools and methods for ontological modelling are still far from being mainstream.

Semantically augmented File Systems, and ReiserFS

2005-09-25T12:28:00.000+02:00

Although File Systems are the most widely used form of Content Management System, their mainstream implementations (on Windows and UNIX systems) have been until recently left untouched by various technological and functional innovations, happening in more specialized contexts. For literally tens of years, hierarchical folders have been the only widely accepted way to organize files on personal workstations.
BeOS introduced metadata attributes for files, backed by a relational db, but is now defunct. Google Desktop provides an effective way to search personal files with the same user experience of web search: not a new idea, but I have always found previous implementations (Windows' search feature, available form 1995) rather unusable.
The next generation, Apple Spotlight and WinFS will make heavy use of context-dependent metadata for files, based on a plugin architecture.

But I think that the greatest innovator in this arena is Hans Reiser. Ten year old Name Systems Ventures has not only just released ReiserFS4, but keeps asking the right questions (and providing opinionated answers) back from 2001, in their Future Vision whitepaper, which challenges estabilished practices and suggests new approaches and new ways. From a recent interview with Hans:

[...] metafiles are files that are about other files. pseudo files are files that are implemented not by storing and retrieving the data in a regular file but by the plugin calculating what it should construct for read, or performing some operation other than just writing the data somewhere in response to a write. For example, someday cat /home/reiser/mp3s/..../childcat > /dev/dsp will concatenate every file that is a child of my mp3s directory and send it to the speakers.

Someday longer away, you'll be able to use queries in the FS, and send all the blues mp3s that your dad emailed you, or all the mp3s related to "britney spears" and "spoof" to your speakers. Using cat, or other dumb programs absent of querying intelligence. There will be a very very sophisticated naming system, and all the programs in the OS will not need any complexity of their own to tap into the power of sophisticated naming.

Also:

Another thing that did not make sense was that in V3, performance for files randomly generated with a uniform distribution in the 0-10k size range was worse if tail packing was turned on. It "should" have been better. In V4 it IS better, for the reasons described at www.namesys.com at quite some length in the part about why BLOBs are a bad design idea. This actually has implications that go far beyond Reiser4 as BLOBs are the dominant paradigm in the database world...

KM and (Software) Framework Design

2005-09-18T22:19:00.000+02:00

The Pit of Success: in stark contrast to a summit, a peak, or a journey across a desert to find victory through many trials and surprises, we want our customers to simply fall into winning practices by using our platform and frameworks. To the extent that we make it easy to get into trouble, we fail. (Rico Mariani)

I spent a lot of time in the last few years designing and developing software frameworks (mainly for text mining, text classification and statistical natural language processing). I just read a presentation from PDC 2005 (the main annual Microsoft event for developers), "The Art of Building a Reusable Class Library" by Brad Abrams and Krzysztof Cwalina (it is a set of PowerPoint slides, but you can view it with OpenOffice if you are not a MS Office user), which details a set of principles and best practices for developing reusable frameworks, that I found very true from the standpoint of my personal experience.

The framework designer holds a huge responsibility, since if a part of the framework (such an abstraction, or even a simple name) is not naturally understandable, the users, no matter how experienced, will keep failing at using it correctly. Following this premise, the authors provide a set of recommendations, which seems more related to knowledge management (and "cognitive") solutions, rather that practices strinctly related to software developement:

exploit sameness and consistency
prefer scenario-driven design
communicate via leaving artifacts, rather than through documentation
follow a common vocabulary

Generators

2005-09-14T21:54:00.000+02:00

I just discovered the Generator Blog, and, after that, the Uzeful list of online generators.

Generators are small applications (usually web-apps) that automatically produce semi-random artifacts of various kinds, using more or less sophisticated heuristics and/or pattern combinators. Well known examples of generators are the random scientific paper generator, and Chris Coyne's tool for drawing pictures using context-free grammars [see my previous post on GFDG].

What impresses me, however, is the effectiveness of very simple generators. As an example, GFDG has a generator of random underground maps (inspired to the graphical style of the London Tube map), and the resulting images look very plausible; the company logo generator produces very simple logos composed only by two or three ribbons and/or points, which however looks very meaningful, and evokes human-like shapes and somewhat inspiring symmetrical symbols. I guess our very biased cognition system plays a fundamental role (and does a big part of the job) in the process of interpretation of these pictures. As usual, I'm interested in using these tools as an aid for (graphical) design practices.

Not a new idea, but still amusing: the random poem generator.

The Mozilla Platform

2005-09-12T00:47:00.000+02:00

A month ago, Kottke was wondering whether Mozilla Foundation has the vision to make Firefox the most important piece of software of this decade (as an open application platform). I offered my opinion on Paolo's blog: XUL+Javascript is starting to get more and more interesting; however, Javascript is not (yet) well suited for writing large applications. I would love to see a Python or a Ruby engine integrated within Firefox or XUL Runner, that would really be a viable foundation for open, cross-platform network-based applications. Being able to exploit the client (as opposite to heavily rely on the server side) while still being network-based is still an unreolved issue for me.

Today, Mozillazine mentions Brendan Eich's work. Brendan is developing the infrastructure which will allow Python to be used for XUL scripting:

Support for Python in XUL will land in the Mozilla 1.9 timeframe and is expected to be used primarily by developers of extensions and standalone XULRunner applications.

Work is currently ongoing to allow languages other than JavaScript to be used for DOM scripting, which is a necessary step to enable Python support to be implemented. In theory, this will also allow support for other scripting languages to be added to the Mozilla framework. However, there are no plans to support any languages other than JavaScript in webpages.

Although future releases of Mozilla applications such as Mozilla Firefox and Mozilla Thunderbird will ship with support for Python XUL scripting, a Python interpreter will not be included. This is expected to mostly be an issue on Windows (Mac OS X and most Linux distributions already include a Python environment) but Brendan expects this problem to be solved soon.

The Mozilla Foundation has an (old) document on this topic: Roadmap for Language-Agnostic Scripting Support.

Unsolved Information Visualization Problems

2005-08-30T13:07:00.000+02:00

An interesting article by Chaomei Chen, on the Top 10 Unsolved Information Visualization Problems. One of the unsolved problems is aesthetics:

The purpose of information visualization is the insights into data that it provides, not just pretty pictures. But what makes a picture pretty? What can we learn from making a pretty picture and enhancing the representation of insights? It’s important, therefore, to understand how insights and aesthetics interact, and how these two goals could sustain insightful and visually appealing information visualization.
The graph-drawing community has done the most advanced research in relation to the aesthetics problem. However, much of the aesthetics wisdom consists more of heuristics than empirical evidence at the elementary level of perceptual–cognitive tasks. There is a lack of holistic empirical studies to characterize what visual properties make users think a graph is pretty or visually appealing. Research in this area often focuses on graph-theoretical properties and rarely involves the semantics associated with the data.

Other points I found noteworthy: the need of a parading shift from the ability to visualize structure to the ability to visualize dynamics; the importance of expressing causality and inference in order to enable visual thinking and reasoning. (Also see: Tufte's Visual Explanations, and his forthcoming work, Beautiful Evidence).

Data Farming and social software

2005-08-18T16:41:00.000+02:00

Metrist (a web marketing firm, reached via O'Reilly Radar) just introduced the concept of Data Farming, as opposed to Data Mining:

Here's an alternative paradigm: data farming. In farming, you start from a seed or an immature plant, place it in an appropriate growth medium, and tend it with nutrients. Crops, and perhaps seeds for the next cycle, repay your efforts. [...]
I contend that we should look at direct marketing analysis as data farming, and to use the metaphor to justify (with ample support) investments that will pay off marketing cycle after marketing cycle.
And many of us are already doing data farming: extending successful promotional elements to new prospect lists and new vehicles, learning from last season in ths season's re-activation programs. This is farming, sustainable and nurturing, not at all like mining. And smart farmers don't just produce; they learn so that next season will be even better.

Although this is hardly a new practice within the marketing analisys community, I think it's worth noting that most social applications (like Flickr or del.icio.us - and even Wikipedia, eBay and Amazon) can be seen as growing, dynamic and freely accessible data farms. They are not mere "data repositories", since users are continuously stimulated by well-designed social-aware mechanisms to provide new data. The "farmed" data can be easily accessed using specific APIs, and analyzed with more or less sophisticated data mining techniques (even a simple idea can lead to interesting results, see for example Color Code, which explores color usage patterns).

I think the most relevant challenge in building a data farm is the bootstrapping (start-up) phase. What emerges from the Folksonomy Panel at ETech 2005 is that people are willing to produce and share information for many reasons, but mainly because they are going to re-use this information themselves in the future; so, it is up to the (software) infrastructure to enable the communitary reuse and recycle.

Also: John Winn of Microsoft Research has started ML-pedia, a wiki on machine learning models and techniques.

Speculative finance and crafting within virtual worlds

2005-08-12T03:43:00.000+02:00

Massive Multi-player Online games (MMORPG) have virtual currencies, used by players to buy and sell various kinds of items within the game. A well known consequent phenomenon is the buying and selling of virtual items for real-world money, using specialized resellers or private auctions sites like eBay.
But I recently discovered that there is a site, IGE, The Leading MMORPG Services Company, located in Hong Kong, that not only trades real money for virtual money (at the moment supporting near a dozen virtual currencies), but also acts as a Market Maker for a sort of "foreign exchange" financial market for virtual currencies. The amount of exchanged money, although, of course, is orders of magnitude less than the real world counterpart, is however interesting: there are real world businesses that employ people in cheap-labour countries to play games, or to monitor bot players that "farm" virtual money within virtual worlds, money that is eventually converted into real money thorugh IGE, making tens of (or even hundreds) thousands dollars per year.
I had a look at the virtual FX exchange, but it seems to me that the bid-ask spreads are still too wide to make speculative trading profitable. I don't know if this is the consequence of a low liquidity, or a specific policy forced by IGE (however, I wonder whether this kind of trading could became a viable practice in a few years...). Also, it's interesting that exchange rates may vary between two different servers that host the same game and employ the same currency.

Also, another interesting practice is crafting within virtual communities.

My wife plays those multiplayer games like World of Warcraft and Star Wars Galaxies. With populations of real people in the millions, it's pretty insane. One thing I noticed is the "crafting" culture. On one of the games she plays, all the gear -- weapons, everything -- is made by players. You have to mine the soil, build stuff, it's neat.
She tells me there are people who are fashion designers, that make virtual (and real) money making clothes.
The art of crafting in many MMORPG can be just as sophisticated and as satisfying as being an artisan in the real world. Depending on the complexity invovled it can take a great deal of time to learn all the ins and out of an in-game crafting system.

...and crafting means design, style, fashion trends. Wonderful!

Update: the August issue of Wired has an article "The central bank of Sony", that reports that the total annual market for virtual goods is estimated to be $200 million, compared to $1.9 billions for the whole MMORPG sector. Sony's Everquest...

...is a place, with residents, sightseers, and an economy. It has trade relations with the US. Rather than an escape from ordinary life, it's an extension of it.

Update: another opinion on the rise of online games: 10 ways MMORPG will change the future.

Update: from BoingBoing quoting GameSpot:

The Chinese government is mandating that online game companies impose a three-hour consecutive play limit, with five-hour rests, on their players. Players who play longer than three hours lose levels and experience, and after five hours, your account is reset to newbie.

Update: Edward Castronova on doing social design and simulating economy with MMORPG.

Update: Paolo (in a comment) told me about a virtual strike on WoW.

HumanML and the Future of Collaboration

2005-08-10T10:26:00.000+02:00

A lot of interesting ideas from this article in Data Mening Review on "Human Markup Language", being developed by the OASIS consortium:

"Who I Am" and "Why I am Here" are the first two stories communicators must tell before their message may readily be accepted. Recipients, before they take heed of the message, must answer in their own minds those questions demanded of the communicator. Experienced knowledge workers already understand that considerable effort can be expended in validating information and knowledge, a fair amount of which time is spent vetting the sources to establish trust in them and how to understand properly what they have to communicate.

Evolved from the informal practice of using emoticons to improve communication in a world of text-based e-mail, news groups and chat rooms, HumanML is aimed toward a more formal representation of human characteristics (e.g., cultural, physical, psychological, etc.). It is focused on enhancing the fidelity of human communication by providing machine processable subtext through the use of extensible markup language.

Also: "The Six Stories You Need to Know How to Tell" by Annette Simmons. I like the following passage:

Our tendency to try to create teaching that is clear creates an unintended consequence of oversimplification.
When someone understands what you want them to do, but doesn’t buy into why you want them to do it, you will never be satisfied with their performance. Clarity is over-rated in teaching.

Some of my favourite illustrators

2005-08-08T12:51:00.000+02:00

Eduardo Recife. Misprinted Type
Nigel Evan Dennis. Electric Heat
Chuck Anderson. No Pattern
John Ritter. Ritter Illustration
EBoy collective

Not only for their works... also for their attitude.

Idea Futures

2005-08-05T14:20:00.000+02:00

I've just finished reading The Future of Work by Thomas W. Malone. I found really interesting the (not so recent, but new for me) idea of prediction markets. [Wikipedia entry: prediction market].

Q: What is a prediction market?
A: A real-money market that floats a prediction (i.e., an event-driven futures contract) and put a 0–to–100 price on that prediction —price that we understand as the probability of this event.
Q: What for?
A: Making running-time probabilistic predictions ("Clinton #42 will be re-elected: 95%." - "Bush #43 will be re-elected: 55%.") —as opposed to fixed-time binary predictions ("Will Bush #43 be re-elected? Yes.").
Q: Does it work?
A: Overall, these market-generated predictions outsmart the polls, the experts and the commentariat —in any topic where information can be aggregated by traders.
Q: Where is that?
A: On Web-based prediction exchanges. Each of these exchanges organizes many prediction markets that generate probabilistic predictions for topics ranging from sports to weather, finance, politics and geopolitical events.
Q: What's next?
A: Science, technology or business predictions. Internal corporate markets. Play-money prediction exchanges. New market designs. Market-generated predictions conditional on other market-generated predictions and that propose or make decisions (i.e., decision markets). CEOs possibly outsmarted and ousted by decision markets. The Republic entirely run thru decision markets —maybe.

commerce.net, is developing Zocalo, an open-source framework for performing experiments with prediction markets.
A collection of references can be found here. Also interesting: the Foresight Exchange:

At the Foresight Exchange you are able to use your "funny money" (FX-bucks) to bet on the liklihood of future events

Update: two more games based on prediction markets: Yahoo Buzz Game and ProTrade (related to professional athletes).

Update: I just read on Slashdot that FX Exchange has just open sourced their code.

Tags and polysemy

2005-08-03T18:03:00.000+02:00

I just learnt from Paolo that Flickr has just introduced a new feature, which tries to sort the different meanings related to the same tag by clustering the co-occurring tags. Some random thoughts:

It works really well!
...and that is no surprise, since they have a huge corpus of tagged items. Classical text mining algorithms give the best results in this setting, and the fact that the photos are manually tagged by users provides a database with exceptionally low noise.
Whereas del.icio.us seems to be a more IT-related community (just look at the most popular tags list...), Flickr has a much more diversified audience.
Polysemy and hierarchy are two important limitations of 'emergent semantics' approaches (like tagsonomies/folksonomies), and I'm glad these problems are being addressed.

Next steps: use cluster analysis to retrieve photos that are not marked with a searched tag, but with tags with similar meanings; further analyze tags in order to infer is-a relationships.

Detailed metrics results

2005-08-02T18:43:00.000+02:00

Here are the complete results of the application of the HITS and PageRank algorithms to the graph of the references within the entries of Wikipedia.

Authority [zip, 8.5mb]
PageRank [zip, 8.5mb]

I'm not putting online the whole reference graph, since the file is huge (500 mb), but if you are interested in using it for doing further research, simply ask me.

Network Analisis for Wikipedia

2005-08-01T22:26:00.000+02:00

Here is the final version of our paper for Wikimania, Network Analisis for Wikipedia.

The aim of our simple experiment is twofold: to gain some understanding of the high level structure of Wikipedia, and to get some insights about its content, and in particular on its hidden cultural biases. Each user usually browse a (relatively) small set of entries during the normal usage of an encyclopedia; and such small sample is more representative of the enquiring user world view, rather that the whole encyclopedia. As a consequence, nobody is really able to have a mile-high fisheye view of Wikipedia’s content; of course it is possible to perform some basic statistic analysis (like counting the entries, or measuring the rate of growth) but these are purely syntactic measures. We maintain that network analysis offers a simple way to have some more "semantic" measures, since it formally analyzes an intrinsically semantic human-generated type of content: the use of terms to define other terms.

See also: our previous work on network analysis and Wikipedia.