Positioning Prediction Markets for the Enterprise

As I noted in an earlier post, Prediction markets can be viewed as data mining tools to access the unstructured data stored in an enterprise’s distributed human capital resources. Prediction markets are a tool that allows the enterprise to rapidly, broadly, and cost effectively access these individual's information (both employees and external constituents).

The feedback from the Prediction Market provides another source of data to be considered and leveraged by corporate decision makers. Ideally negative prediction market indicators can serve as warning lights suggesting the need for further investigation and action by the corporation to address potential problems. The response of the prediction market to any actions taken can serve as one of many inputs into the action's potential effectiveness. The real-time nature of prediction market feedback makes it a useful proxy for key results that may not be available until some point in the future. As an example, if Wall Street and Boeing's chairman had paid attention to bet2give's Boeing 787 delivery date stock several months ago the recent 787 delivery delay announcements might not have been so surprising.

There is enormous hype around Prediction Markets and collective wisdom today however enterprise adoption has proven modest. Defining Prediction Markets for what they are, data mining tools and directional indicators, may make them more palatable to senior management whose buy-in and support are critical to gaining their acceptance.