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Prediction Markets

August 21st, 2006 · 1 Comment

Business Week writes:

[Prediction Markets] are gaining wider acceptance. Markets are being used to let employees weigh in on a range of matters, from product launch dates to sales growth. Companies such as NewsFutures and Consensus Point even offer software and services to help companies set up their own prediction markets.

If it sounds like gambling, to some extent it is — except corporate prediction markets typically deal in play money. While some companies hand out cash prizes to winners, most give nonmonetary awards. The markets are helpful because they aggregate knowledge from a wide base of participants, and they can give CEOs a better handle on employee thinking. Still, getting busy workers to play along can be a struggle, and companies are divided on whether markets are reliable enough to justify the costs and the setup hassles.

Tags: Management

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