About Me

I am a Chartered Accountant with a public practice in Toronto, Canada.  While much of my work involves personal and corporate income tax, my practice consults with corporations to improve their business planning processes.  I am a graduate of the University of Toronto, with a B.Comm degree, but this is somewhat misleading.  A significant portion of my course load was focused on economics, and in particular, information economics.  Then, it was a relatively new branch of economics, and it had yet to become overly bogged down by theoretical calculus!  In short, it was fun.  I wrote an undergraduate thesis:  “A New Theory of the Economics of Discrimination.”

Then, I moved on to the corporate world, obtaining my CA designation while working at Price Waterhouse in Toronto.  Several years later, I branched out on my own, developing a public practice primarily focused on tax consulting.

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Responses

  1. Hi Paul. I read one of your posts on Midas Oracle regarding GM prediction market. Please take a quick peak at StyleHop’s website (www.stylehop.com/enterprise). We are attempting to crowdsource demand forecasting for fashion at the style level. It’s a huge opportunity.

    Right now I’m spending lots of time reaching out to experts for insights on how to structure our data gathering. We don’t want to set up a true prediction market – too complex for our fashionista consumer panel. What’s the best way to solicit and capture predictive consumer preference data? If this is a topic you might be interested in hearing more about (I would love any opinions/thoughts you have on the topic), I would welcome setting up a phone call.

    Much thanks,

    David Reinke
    CEO, StyleHop Corp.

  2. This may seem like an odd question, but how important is the “market” of prediction markets? Is it really necessary that participants interact with each other or see what the price (i.e. probability) is? If participants are incentivized simply because of money, what makes Prediction Markets any more immune to speculation than say, stocks on Wall Street? Isn’t the premise behind “the wisdom of crowds” that everyone acts independently of everyone else? Isn’t that principle violated if we see what everyone else is thinking (i.e. if we see the market price)?

    Might a survey (repeated every week) where every participant independently indicates a number (ex: sales) and a confidence rating be more effective? Is this any different from asking a group of participants how many jelly beans are in a jar, or iteratively asking participants for jelly bean estimates while adding/removing jelly beans?

  3. Hi Ryan…

    Thank you for your post.

    Prediction markets are not immune to speculation (I assume you mean manipulation), but it should not matter (too much) as long as there are sufficient knowledgeable traders. While Wall Street frowns on insider trading, prediction markets welcomes it with open arms, because it introduces more information to the market, leading to better predictions.

    Yes, we want traders to act independently. They can still do so regardless whether the market discloses the price or not. We see this at work in the example of Galton’s ox (not a prediction market). This is really an example of collective intelligence.

    In general, prediction markets are better predictors than polls or surveys. Surveys/polls don’t provide the incentive to reveal accurate information the way prediction markets do. The jelly bean jar is the same as Galton’s ox.

    I hope I’ve answered your questions.

    • Yes, thanks.

  4. Hi Paul,

    I understand you are an expert in accounting for restaurants as well. I am studying on technologically assisted tax evasion systems such as Zappers
    and other skimming operations to assist auditors to prevent and detect such illegal techniques.
    If possible, could you please share the most effective/efficient procedure/s that can assist auditors in detecting such programs? I mean, assuming that an entity is using Zappers, what is the best way to detect this?

    Thanks
    Ari, CA

  5. Perhaps the easiest and most effective way, to detect the use of a zapper, is to make a series of cash purchases at the target restaurant. Then, during the subsequent audit, test to make sure those guest checks are still in the POS system and recorded in the accounts. Any missing cash guest checks OR those guest checks having new check numbers will indicate the use of a zapper to remove checks from the POS system.

    Zapping guest checks out of the POS system has to be done carefully. If not, fragments of the zapped checks will remain on the computer hard drive, which can be found by a computer tax auditor. Some systems report inventory usage based on items ordered. If the zapper only removes the guest check without removing the usage of product, that’s another indication.

    Finally, you can do it the old fashioned way – by analyzing gross margins. If they’re less than expected based on prices charged and the cost of goods sold, there may be some sales being suppressed.

    You should refer to my other blog for more information on this subject:

    http://cdnbartaxadvisor.wordpress..com

  6. Im wondering if fantasy sports leagues could be interpreted as a form of prediction market? or would it only hold for a point in time betting pool like the CBC Playoff pool.


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