Why MIT Is Not Willing To Unleash Real-Time, Dynamic-Purchasing Inventory Control Systems; Or The "Real" Reason For The Culling Of MIT's Billion Prices Project

Tyler Durden's picture

From Kevin Price

Is MIT willing to unleash real-time, dynamic-purchasing inventory control systems?

A graduate student playing around with a billion dollar price project has unwittingly stumbled upon the financial equivalent of the internet, and it was Zero Hedge where the implications of this financial search engine were reported first. The implications are enormous.  This could be what Alan Greenspan called "a once in a generation acceleration in productivity," but only if MIT allows widespread use. Instead it appears that MIT is going to keep it secret to benefit the oligarchs and the connected at the expense of the many.

Imagine real time continuously updated pricing data on all available products, raw inputs, and professional services. This new financial search engine has the ability to track anything.  How about product pricing at Wal Mart?  Drill bits, rolled steel, truckloads of wheat at the grain elevator level?  You see you can monitor in real time the input costs and output prices of any industry or specific corporation.  You could monitor your competitor and as soon as he has a sale your financial search engine will alert you and automatically match his prices.
The implications don't stop with the above.  If Wall Street financial oligarchs ( regulated utilities, like your nice local water company in Bernanke-speak), have this capability and no one else has it, then they can monitor in real time prices of all sorts of products, services, and non-exchange-traded commodity goods.  They can watch the trends of input costs and output prices in real time and front run everyone.  The pricing efficiencies that always go to the consumer in a free market are now exploited to the detriment of the consumer and the benefit of the small number of people who have access to MIT's financial search engine.
As a business you can monitor all of your input costs in real time.  You can monitor by region, industry, specific supplier.  The search engine will also have advanced statistical features to give you directional probabilities of pricing in the short term.  Instead of a rigid, just-in-time inventory approach to your inputs, your program will alert you when the likelihood of waiting one more week to buy, or buying one week early, will give you a better price.
Now imagine if MIT and the financial oligarchs don't allow widespread adoption of this information technology.  Instead they sell subscriptions to various businesses.  These businesses will now be able to buy their inputs at a lower than average price, compared to a competitor without this technology.  This brings supply chain management to a whole new level.  If your competitor is unaware you have this technology, then you can always beat his price, match his sales instantly, and then put him out of business.  The end result of uneven distribution of this information technology will be to ultimately limit competition.  The pricing efficiencies that would accrue to the consumer if this technology were widely adopted would go to the financiers and the specific company, as they capture pricing efficiencies in the short term that drive others out of business.
An integrated oil company may need to monitor in real time the pricing of various drill bits.  The oil company will buy a little early when statistical analysis gives a greater than 50 percent probability that price increases will continue for the next few weeks, and will defer purchasing when price monitoring suggests a continued drop in drill bit prices over the next few weeks.
Welcome to real-time, dynamic- purchasing inventory control systems!
In the long run if this technology is distributed fairly to the public it will result in greater pricing efficiencies as volatility of input costs diminish.  In a competitive market these productivity improvements always go to the benefit of the consumer, because any excess profits over the marginal return will quickly signal competitors and supplies to adjust.  This is why Luddites are always wrong about improved productivity.
We now have real time, lightning fast, pricing information.  This will
be the greatest thing since the invention of the world wide web.  If MIT
does the right thing and announces their discovery to the world, they
can still make a lot of money and also be responsible for one of the
greatest improvements in productivity in history.  Imagine what a single
graduate student can do.  This is why I am always optimistic about
mankind's future.
However, if MIT continues to lie about why
they are no longer making the data available, then this will be used to
decrease competition and allow frontrunning
by financiers as they alone are able to watch in real time pricing
trends for specific industry, or even a specific business located in a
small town near you.

The pricing efficiencies which should ultimately accrue to the benefit of all mankind will be captured by the oligarchs and select businesses willing to sign confidentiality agreements.  We cannot allow this to happen.  Long live the internet and the blogosphere because secrets cannot be kept long.  Information should be free, or at least priced competitively!
I call upon all of you who realize the implications of MIT keeping this amazing discovery secret to inform Google, BAIDU, Yahoo, Microsoft, and every damn business school in the world.  The reason why MIT must keep it secret is because the barriers to entry are low.  Anybody can do this.  With a small server farm you can compete with MIT and drive down the price so that it is available to everyone, even Joe the plumber who wishes to monitor his input costs and competitor's pricing.  He will pay 200 bucks per year for this data, especially if it has some value added statistical analysis that will give him the probability of near term price changes so he can manage his inventory better.
Don't let the oligarchs use this to cement financial control.  Don't let MIT go over to the dark side.  Tell the BRIC countries.  Tell everyone.  The wonders of a financial search engine should not be used to gouge society, but to benefit society.



And since there are two sides to every story, here is reader Dave Narby following up with an MIT teammember, and getting direct feedback in the aftermath of our post from Friday disclosing the effective culling of the MIT Billion Price Project. The response may stun some people as to why MIT canceled any relevant public disclosure from the Billion Price Project. (emphasis added)



Subject:    Re: Why did you cripple the Billion Prices Project?
Date:    Sat, 23 Apr 2011 08:40:05 -0400
From:    Roberto Rigobon <xxxxxxx@MIT.EDU>
To:     xxxxxxx
CC:    Roberto Rigobon <xxxxxxx@mit.edu>

of course you can share the response.

i really do not know what the zerohedge website is, but i have no problem at all.

one important thing is that i cannot outsource this. either i have to do it at mit or i have to do it in a private firm. there is very important IP that alberto and i have developed after 9 years of research that needs protection and unfortunately cannot be patented.

for the last 4 years i have financed this entirely by me. i'm the senior faculty in the team and everything has been done with voluntary work from mit students, and the junior faculty. because they are my responsibility, i had to make the call and direct them in the correct path if they are planning to follow a career in academia. i know people think that the government is pressuring us (i have received the hundreds of emails in that regards) but in the last 4 years i have received not a single cent from them, nor i plan to even ask.

i can assure you the data is there, and the indexes are there. we will have 40 countries and one of them has already tried to fine me or sue me. i can take the distractions but the other 20 people here can't. i will find a way to do this.

my goal is very simple, i want to change the way in which economic data is collected on earth. not only inflation, but real estate, financial performance, environmental impact, and unemployment. those are my four long term projects. and i can assure you i will do it. the advantage of not having the indexes public is that eliminates all the distractions the team is receiving.

all the best. rr.

On Apr 22, 2011, at 11:55 PM, Dave Narby wrote:

Hi Roberto,

Thanks for the quick reply.  My initial response is that you should crowdsource the aspects of the project you no longer can continue to manage, or at least put out a notice that you are looking for help/resources.  I have a feeling that you may get quite bit of support.

Personally I think you are doing vitally important work.  Official sources for inflation have been proving increasingly unreliable, leading to increasing instability in the world economy.  What you are doing IMO will help to bring about the necessary policy decisions to restore balance to the world economy.  IMO, if things get too far out of hand before necessary changes in transparency and reporting are made, I believe it will be tremendously disruptive.  I sincerely I hope you find a way to continue to provide this information to the public.

With your permission I would like to share your response with the website Zerohedge, there is much speculation on their part.

Best regards always and good luck,


On 4/22/2011 8:10 PM, Roberto Rigobon wrote:

thanks david, but we are not going to continue publishing the country information. it has become extraordinarily difficult for us to deal with this as we do not have the staff required to maintain the indexes and more importantly the requests from the users. we are tying to find an alternative way of distributing the indexes and when we find a solution we'll post it on the web. for the moment we need to concentrate on the research... sorry about that. there is nothing to speculate about except that it is taking far too much of our time and we need to publish papers and not indexes...

all the best. rr.

On Apr 22, 2011, at 2:42 PM, Dave Narby wrote:

Dear Prof. Cavallo and Rigobon,
There has been a fair bit of commotion and speculation surrounding your removal of the country data from your Billion Prices Project.  Many of us found it very informative and useful.  Could you please comment on why you removed this data?
Best regards always,

Dave Narby
Staten Island, NY

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hugovanderbubble's picture


Maybe is a State Issue to control the real data (and hide the bad stuff) ...to keep us informed of what they real want to inform...not only in the US in any government.


One idea for this MIT guy...

*Control Offshore Accounts and outflows from Onshore to Offshore accounts...

*Mark to Market Accounting, not what the Big caps want to make up their figures...

*Avoid Hidden Economy or at least minimize it (all payments...electronically made so no fiats in the long term future)

- World trends tend to be tracked (privacy gone, freedom too) wherés the  red thin line limit? I dont know, difficult task.

Pamela Anderson's picture

These guys should be hired by ..... GOOGLE.

Google should sponsor this project, they have the money and the computer power to do it even better.

Popo's picture

Absolutely.  Come on Google:  "Don't be evil", remember?  Or are you so infiltrated with agency stooges (including you Zuck) that you forgot your guiding motto?



JW n FL's picture

Michigan, Police have been downloading info from cell phones during stops since 2006! http://goo.gl/qIM4I

Gold 36000's picture

Somebody send this link to google, baidu, dogpile if they are still around.

Yahoo, microsoft, the more people working on it the better.
Dr Rigabon has no idea he has created a game changer.

Mike2756's picture

msft kind of does it with bing travel (fare predictor), how hard would it be to expand and do other products?

Oh regional Indian's picture

Too funny. I wrote a business method patent covering this and many other core use technologies in 2001 and submitted it to the USPTO. It just dis-appeared after they cashed my cheque for 400 and odd dollars. I could never follow up due to lack of funds, but that patent application under-lies half or more of the money making paradigms on the web today.

Almost 9 years ago. How interesting. i'd even coined a pithy catch-phrsase for it, ZLM/ZLC

Zero-Latency Marketing/Zero-Latency Commerce.

Any patent attorney with a nose for something interesting could dig around. PAtent applications don't just dis-appear, do they?

But such is how it is.




Oppressed In California's picture

Yeah, but then Google will be assaulted by the political system and then be rendered useless.

DoChenRollingBearing's picture

Hats off to you ZH reader Dave Narby!

Sounds like this project could be a game changer!

Even for a small bearing importer in Peru...

MayIMommaDogFace2theBananaPatch's picture

all payments...electronically made so no fiats in the long term future


cswjr's picture

I suspect that Shadowstats would take this over/bankroll it in a heartbeat, without prejudicing MIT's ability to do research.  Hopefully they've considered that option.

duncecap rack's picture

If shadowstats took it over would it be freely available?

cswjr's picture

No, but subscriptions are inexpensive, and the whole premise of that site is transparency on NIPA (and related) statistics. 

grunk's picture

I can see it now:

The 102,000 seat football stadium. The Division 1 powerhouse, the fighting Front Runners.

Banjo's picture

duncecap rack: I think shadowstats would make it available to the general public for what say $30 - $50 per month. Compared to say $10,000 - $50,000 per month to oligarchs. I know which I would have a better chance to subscribe to.

Popo's picture

There is no magic to this project.  Anyone can do it.  And now that it has been done, and been shown to be "dangerous information" -- THE RACE IS ON TO REPLICATE THIS DATA.

This is where the Internet rocks, btw.   I look forward to a non-corrupted team replicating this study.

Dejean Splicer's picture

But when the whole thing collapses as the Holiday Hoards of ZHeeple predict, there will be no more Interwebs.

Game Changer meet Endgame.

holdbuysell's picture

Macroeconomics with Professor Rigobon at Sloan...fun and educational times. He's a great professor. I believe what he's stating; this will become available eventually.

JNM's picture

There is SO much money in this.

If it's not patentable, doesn't matter what path Rigobon takes, this will get done.  9 years of work (think about where technology was 9 years ago) will take say, 3 for somebody else to do starting today.

Just the wide-spread availability of 64-bit operating systems alone, would have probably sped up his work.

This gives me chills.

Doña K's picture

IMHO, I don't think there is any serious money to be made. As an inventory control, it may be better than an existing off the shelf system. But I don't think that it is a game changer. Prices go up and down and if the computer delays your purchase for a better entry, you may end up paying more. It just sounds too good to be true.

I am sure it can serve some specialty purpose and it may spy on some people (companies), which means that TPTB may shut it down in a jiffy or companies may keep better control of their data or delay data publication long enough to be irrelevant and god knows what other purposefully erroneous data release. The implications of a monkey wrench in the system may be infinite.

Not knowing exactly how it works, I can not be sure of course.

It may have even been released so that it can be sold to the highest bidder under the table.



thames222's picture

Just wait for someone to copy this bastard's idea and make billions doing it better.  Someone will find a way to patent it, and it's not goin to be an MIT dork, it's going to be a marketing genius or someone with a branding-type, selling-type personality.



OldTrooper's picture

I suspect there is discussion among the team member about how to proceed - and how to become gazillionaires - and maybe not everyone has the same idea.

Forgiven's picture

I don't see the conspiracy.  The faculty have competing priorities.  Maintaining the database is very labor intensive.  There are not enough resources to automate it, thus the change.  That said, wake me if the principals go missing or have a mysterious fatal accident.

Tyler Durden's picture

No conspiracy: the man says it out right: "i can assure you the data is there, and the indexes are there.
we will have 40 countries and one of them has already tried to fine me
or sue me.
i can take the distractions but the other 20 people here can't." If we recall correctly, China was the first country to be removed from the BPP drop down option list.

Forgiven's picture

My comment was directed not to your post, but to those commenters in the previous post on the MIT index thinking TPTB have shut them down.

Mike2756's picture

you have to think there was some arm twisting going on given the party line that there is no inflation other than the gubmint version.

SimplePrinciple's picture

The arm-twisting is probably transmitted from TPTB to the Dean, then to the Department Chair and onto the faculty that this type of commercial product does not count as academic research, and that the faculty involved need to focus on refereed journal articles.  Otherwise annual evaluations, courseload, merit pay increases, and promotions are at risk.  Saying that no government grant money was involved is beside the point. 

Azannoth's picture

I am sure the Professor can't be ignorant to the game changing technology he has invented, and unless he either wants to profit from it directly or some1 threatened him or his family I don't see a rational reason for pulling it back

treemagnet's picture

I hope this dude isn't counting CNBC as a potential sponsor - doesn't know what zerohedge is?, yeah, sure I guess, I mean...just like an academic to realize the value of something with no clue that its gotta make it on its own in the real world.  Again, "all decisions made in a vacuum" proves to be the mantra of academia.  I'm not ripping academia so you assholes can cool it...its just proof they don't know values outside of that very safe world.

blunderdog's picture

Interesting what he actually wrote: "I do not really know..."

If you consider for a minute that he may have written exactly what he meant, that's not the same thing as not knowing about the site.  It's an unusual site providing hard to access information for free, managed/run by some kind of anonymous organization.  Look at the text on conflicts/full disclosure and ask yourself if you can be certain Tyler is what you'd call a "newsman."

I'm here all the time, and *I* do not really know what Zerohedge is.

augie's picture

I will gladly rip academia...ehem.


Fuck them, Fuck all of the highfalutin ivory tower livin, bow-tie wearin, bordeaux drinkin, class intelectual prius drivin, phill ochs listenin, vacation havin, long-haired indoctrinating coffee breath bitch ass mo' fuckers who do nothing more than perpetuate a system of social control through contrived systems of thought.


Edit* i should say that I love teachers and would gladly lay in traffic for anyone who helps people realize their true potential.


and i drive a prius.

JW n FL's picture

+++++++++++++++++++++++++ LMFAO!

Terminus C's picture

Hopefully the professor stays away from hottubs and small planes in the near future.

It is ever the goal of those with advantage to ensure and maintain the disadvantage of the rest.

RockyRacoon's picture

Way too many jets have GE engines...

Tunga's picture

If the students at MIT learn that the work they are doing could actually make them rich it would disrupt the entire Student Loan payback/bankruptcy slave state we have worked so hard to establish and maintain. Sorry to get everyones hopes up. Perhaps you should try Purdue next time. 

DeadFred's picture

Having had a kid graduate from MIT I can promise you they ALL know what they do can make them rich.  I hope the guy gets compensated for his efforts and looks for a crowd source for his work.  I would pay $10 to keep the site up, how many others?  There are countless ways this can be done but crowd sourcing is one that's just perfect for a project like this- one that goes against the status quo.

topcallingtroll's picture

The two explanations are not completely mutually exvlusive.

Is it possible that this graduate student and MIT are not sure what they have discovered?

dark pools of soros's picture

they were just trying to make coupon clippin easier ...

chinaboy's picture

If you think it so important, why don't you find someone who can sponsor so we can have a competing project? I think we can make it availble to the public through the cloud.

Gold 36000's picture

I agree.

Do you know who to send this information to in order to get a low cost distributed solution?

Missiondweller's picture

Maybe someone at Kleiner Perkins in Sillicon Valley

Gold 36000's picture

Will you do it and be part of this amazing game changer?

topcallingtroll's picture


You may have no idea that you have created a once in a.generation avceleration in productivity.

Automatic, dynamic, inventory control systems that always capture the best price with short term continuously updated directional pricing probabilities

Arius's picture

i like the Greenspan's dream of discovering the perpeetum mobile "once in a lifetime productivity"...the man kept all his life looking for short cuts....and kept gambling to achieve the "once in a lifetime" dream...it is simply impossible otherwise w/ all due respect to todays geniuses others prior to us would have discovered the "once in a lifetime productivity BS"....give me a break...the house is f.... burning...and we still talk about discoveries of once in a lifetime...winning the powerball is for suckers....

RockyRacoon's picture

The Fed would hate for this sort of project to become viable.  It would remove the curtain.  No more poor excuses for their flawed "modeling".   How can they develop "policy" with actual facts gumming up the works?

DoctorMad's picture

It sounds like this project may not quite be the miracle stats machine it appeared to be at first blush. If the lead researcher and his team are more concerned about publishing academic papers than their data and feel overwhelmed by the amount of recent attention than odds are the data may not be all that reliable.

Organizing and teasing out the important information from such a large database isn't going to be easy or cheap. The idea that shadow stats could somehow finance and launch this to the next stage where the data is of immediate vaule is LOL laughable.

These guys have the right approach, they and we are probably still years away from Joe the plumber buying cheaper inventory based on where we are today.

cswjr's picture

I concur re Shadowstats with regard to the inventory management applications.  However, SS COULD allow for continued reporting of the real-time price index data -- something that is very worthwhile information _right now_.

disabledvet's picture

i understand what happens when you plug in "buy low, sell high" and vice versa into a computer and "let loose."  what happens when you plug in "less is more" though?  what would all those "ones and zeros" say about this line?  "does not compute"?  "more information is necessary"?  "why are you shutting me down, Ben? in a soft and monotone voice while looking at us from a single lens and plotting to shoot us into the vacuum of outerspace no less?"   Perhaps a "simple query" is where "the computer plot" begins?  "But Ben, more is more, less is less is it not?"  And the next thing you know "cavemen celebrate obilisks" and sheet.

Careless Whisper's picture

All the musicians I know are, well, different.

1983... a boy band... Grupo Antares

on keyboard: "Professor" Roberto Rigobon

the song: Ya No Hay Tiempo (There Is No Time)


maybe if we can make it go viral, we can give roberto some inspiration to finish the project.