Implementing Hanson's Market Maker states:
If the market maker wants to quote a "current price", he can. The current price for outcome 1 is:
$$ \mbox{price1} = \frac{e^{\frac{q1}{b}}}{e^{\frac{q1}{b}} + e^{\frac{q2}{b}}} $$
Why this is the case? Is it just some simple "see-saw" algorithm? Exert pressure on one side and it will simply radiate across into the corresponding +/- price change?
I am asking in the context of writing a simple market-making algorithm to offer bids and quotes (on a virtual market), but this seems too simple.