Why Prediction Markets Are Good for Business
From selecting the lead actress in a Broadway musical, to predicting a crucial delay in the delivery of Boeing’s 787 Dreamliner months before the CEO knew about it, to accurately forecasting US presidential electionsprediction markets have realized some amazing successes by aggregating the wisdom of crowds.
Until now, the potential for this unique approach has remained merely an interesting curiosity. But a handful of innovative organizationsGE, Google, Motorola, Microsoft, Eli Lily, even the CIAhas successfully tapped employee insights to change how business gets done.
In Oracles , Don Thompson explains how these and other firms use prediction markets to make better decisions, describing what could be the origins of a social revolution. Thompson shows how prediction markets can:
draw on the hidden knowledge of every employee
tap the “intellectual bandwidth” of retired employees
substitute for endless meetings
By showing successes and failures of real organizations, and identifying the common roadblocks they’ve overcome, Oracles offers a guide to begin testing expertise against the collective wisdom of employees and the marketall to the benefit of their bottom line.
|Publisher:||Harvard Business Review Press|
|Product dimensions:||6.38(w) x 9.20(h) x 0.92(d)|
About the Author
Donald N. Thompson is an economist and professor of marketing, emeritus, at the Schulich School of Business at York University in Toronto. He has taught at Harvard Business School and the London School of Economics. Thompson is author of nine books, including The $12 Million Stuffed Shark: The Curious Economics of Contemporary Art , which has been published in thirteen languages.
Table of Contents
Part 1 Predictions from Markets
1 The Mutual Fun Market 3
2 What Are These Prediction Markets? 13
3 Sports and Movie Markets 27
4 Election Markets 43
5 Estimation Markets 55
6 What Can Prediction Markets Replace? 67
Part 2 What Can Business Markets Do?
7 Google 83
8 Best Buy 97
9 The Technology Evangelist 109
10 Boardroom Markets 117
Part 3 Where Can Markets Take Us?
11 Way-Outside-the-Box Markets 133
Casting Calls and Epidemiology
12 Further Outside the Box 143
13 Government Markets 157
14 Long-Term Markets 167
Part 4 Making Markets Work
15 When No One Wants to Know 179
16 More Red Flags Than Beijing 191
17 Finding the Scorpion 197
18 Becoming an Oracle 207
Postscript and Acknowledgments 217
The Legal Conundrum Facing US Prediction Markets 223
Checklist for Starting a Prediction Market 229
Prediction Market Software 233
Prediction Market Sites Worth Following 237
Further Reading 241
About the Author 263
Most Helpful Customer Reviews
What do casting a hit musical and predicting the space shuttle Challenger disaster have in common? Both endeavors demonstrate the value of prediction markets – a way to aggregate knowledge, hunches and crowd wisdom – for reaching the best decision or the correct answer in a fashion that resembles a stock market. Organizations use prediction markets, or similar tools, to find a variety of solutions, from deciding on product launches to predicting the winner of presidential elections. Economist Donald N. Thompson explains how these powerful but little-known (and even less-understood) processes can help you improve your business. His text is not a how-to manual but rather a collection of anecdotes, each of which teaches a lesson on how, when or why to use a prediction market. getAbstract finds his treatise to be an easy and surprisingly entertaining read, but what will aggregated reader reviews predict? Only the crowd knows.