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The First Honorary Cheez-Whiz Prize: my-currency.com, where play money is play wisdom

When I was a child, I used to love to play Monopoly with my kid sister, Pammy. She was sweet and passive and just wanted to play, where I’m the most competitive. I would routinely put her six figures in debt, then just keep lending her more and more money, so that I could put hotels on absolutely everything.

I think this proves that I am an incomparably talented real estate investor. Kirk Kerkorian owns three of the four corners of the intersection of Tropicana and Las Vegas Boulevards. But the only difference between us, as real estate investors, is that Kirk is playing with real money, where I was playing with play money.

That can’t be much of a difference. Can it?

If you’re thinking, “Who would bother to answer such a dumb question?” — there is an answer: my-currency.com, a brand new Zillow.com wannabe that is even stoopider than an AVM for pricing homes.

The site explains itself in a particularly soft-skulled newage style:

CrowdValue is where we process everyone’s idea of value for specific problems – such as “What is the value of a house for sale” or “what will be the value of a square foot in 6 months in my neighborhood”? So in that regard, CrowdValue is exactly like the stock exchange – it brings people together to coordinate all the different views of value and settle on an equilibrium price, at a point in time. CrowdValue is a trading engine and marketplace.

No, CrowdValue is a silly, masturbatory game. Stock prices are not equilibria, they are a consensus among buyers and sellers about real values. A play money stock market is as dumb as… a play money real estate market.

An AVM is at least rational enough to make guesses about what real traders might do. There is no value whatever in making guesses about what pretend traders will do with pretend money. Most especially since real buyers and real sellers are the only people who can establish the market value of real property, by negotiating to a meeting of the minds.

I’ll award the first Odysseus Medal next week, but this week marks the inauguration of the Cheez-Whiz Prize, the stoopidest application of gee whiz technology to come across my desk.

And my-currency.com is the first winner, of course. The Technorati buzz was deafening, and that alone should put skeptical minds on notice. My feeling is that the Wisdom of Crowds idea is itself hugely dubious, but there is absolutely no reason to expect people to behave rationally where they have nothing of importance at stake.

That is: Anyone can win big at Monopoly. Only Kirk Kerkorian owns MGM/Mirage, Inc. If you don’t get the difference, you don’t have to tell us which side of the Blackjack table you stand on.

Winners of the Cheez-Whiz Prize should feel free to announce their achievement to the world. Virtue is its own reward, so I doubt I’ll do anything special for winners of the Odysseus Medal. But I’m thinking that, at the end of the year, I should award a special Cheez-Whiz Idea of the Year Prize. Maybe I’ll give the winner a Zune, the chocolate Cheez-Whiz treat that only lost $289 million on its way to the social.

Anyway, good on ya’, my-currency.com. Yours is probably not the stoopidest idea I’ll talk about in this feature, but it will always be the first…

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  • 5 comments

    5 Comments so far

    1. Jeff Turner February 2nd, 2007 10:11 pm

      I just spent 15 minutes going through the site and it was about 14 minutes too long.

      Well deserved award. Congratulations, my-currency.com!

    2. [...] Paul Kaihla at Business 2.0’s The Real Estate Economy calls it a Zillow-killer; while Bloodhound Blog, gives the site their First Honorary Cheez-Whiz Prize. [...]

    3. jf.sellsius February 3rd, 2007 11:37 am

      Wholeheartedly agree. Surowiecki’s theory required certain prerequisites that most crowds cannot meet. In fact, his book devotes a good chunk to showing the madness of crowds. MyCurrency valuation is as likely to adequately value your home as a confederacy of dunces (h/t to John Kennedy Toole).

      http://tinyurl.com/yv3cje

    4. Matt Carter February 5th, 2007 6:57 pm

      “Stock prices are not equilibria, they are a consensus among buyers and sellers about real values.”

      –Actually, stock prices are a consensus among buyers and sellers about perceived values. If you don’t have complete transparency, people WILL sink their life savings into companies like Enron that, in retrospect, have the “real value” of a tulip bulb.

      “There is absolutely no reason to expect people to behave rationally where they have nothing of importance at stake.”

      MyCurrency says that what users (real estate professionals providing valuations) would have at stake is their reputation. The more accurate their valuations, the higher they would appear on “expert” lists that would supposedly get them leads for participating in the site.

      Whether MyCurrency is able to attract a “wise” crowd and counter attempts to game the site remains to be seen.

    5. Greg Swann February 5th, 2007 8:57 pm

      > Whether MyCurrency is able to attract a “wise” crowd and counter attempts to game the site remains to be seen.

      Here’s a much better idea.