Prediction markets and Innovation

Check out this NYT article about using prediction markets to capture innovative ideas, foster communication and to give heads up to people in an organization about events or trends that are emerging below the radar. More companies are jumping into this because they hold some promise.

Google has experimented with this as well for improving idea generation and communication, and some folks have actually researched how well it works.

Prediction markets have many uses, one of which apparently is not political markets. Market response to elections seems to follow the latest polls exactly and is not often that accurate. These things have their limits when it comes to the general population. Within organizations, where knowledge is both common and not, they may be quite revealing.

As many of you know, I have been looking at prediction markets and other ways of predicting the future. Interestingly enough, prediction markets seem better at finding and aggregating existing information about the present (like 'we are behind opening a store in China' as the story points out).

If you want to know more about wisdom of the crowd-type techniques, read The Wisdom of Crowds. Who wrote it? Click the link, I'm too lazy to post all that info when you have your hand on the trackball.