Along with the book Wisdom
of Crowds, Google Prediction Markets seem to be touching multiple fortune
500 companies in 2008, but a quick Google search today, it seems that except
for a few pockets of interest, this “market” has mostly dried up. Moreover, one of the stock exchanges sued
Intrade for hosting prediction markets on their site. Intrade’s response was to shut down the
election prediction market because most of their profits would have gone to the
cost of the regulatory agencies.
I could not find many instances were prediction markets were
used in government, but the ease of implementation begs the question, “Why?” Software can do most of the heavy
lifting. At most, managers would have to
come up with the questions to allow the market to run. For the reasons discussed during the brief
last Monday, government managers are dismissing a tool that could save the government
millions of dollars. This is not an understatement
by any stretch of the imagination.
Another course of action that was not discussed during the
case is to throw out any incentive. Mandatory
fun for everyone! Seriously, this could
be achieved simply by writing it into a new employee’s job descriptions. Indeed, changing current employee’s job
description may take some on additional headaches, but this too could be
implemented. After all voting in a prediction
market would take only a minute portion of an employee’s time and the benefits
could be immense. Worse case is that the
market fails and the organization is less a few hundred dollars for the
software.
Would anyone consider implementing prediction markets in
their organization if the software was easy to implement and cost less than
$300?
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