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== Introduction ==

We can trace the origins of the Prediction Markets concept to the works of [http://en.wikipedia.org/wiki/Friedrich_Hayek Friedrich Hayek], the winner of the Nobel Prize in Economics, and a social and political philosopher. Hayek claimed that the price mechanism serves to share and synchronize local and personal knowledge, allowing society's members to achieve diverse, complicated ends through a principle of spontaneous self-organization.

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We are now starting to witness the proliferation of Information Markets into the corporate decision-making environment. One of the pioneering organizations to use Prediction Market as an internal decision-support tool is Hewlett Packard, which is using it as a sales forecasting tool. Intel too is using Information Markets for managing products forecast and production plans. There is evidence that many other organizations like Google, Eli Lilly and Microsoft are jumping into the water, but most of this activity is still in an experimental stage. Organizations are still trying to figure out the kind of incentives to be used, how to make sure that established hierarchies are not threatened and how to maintain a cost effective process etc.

== What are Prediction Markets used for? ==

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=== Judgment biases ===

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~~== Corporate Prediction Markets ==~~

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We are now starting to witness the proliferation of Information Markets into the corporate decision-making environment. One of the pioneering organizations to use Prediction Market as an internal decision-support tool is Hewlett Packard, which is using it as a sales forecasting tool. Intel too is using Information Markets for managing products forecast and production plans. There is evidence that many other organizations like Google, Eli Lilly and Microsoft are jumping into the water, but most of this activity is still in an experimental stage. Organizations are still trying to figure out the kind of incentives to be used, how to make sure that established hierarchies are not threatened and how to maintain a cost effective process etc.

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~~=== Examples ===~~

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~~==== Google ====~~

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As posted in the [http://googleblog.blogspot.com/2005/09/putting-crowd-wisdom-to-work.html Google official blog] on September 2005, a prediction market was set up inside the company with the intention of forecasting product launch dates and other things of strategic importance to Google. More than a thousand Google employees bid on 146 events in 43 subjects. This was developed as one of the projects under Google's policy of employees spending 20% of their time developing whatever new ideas they find interesting. Recently the results 2.5 years running the experiment were published [http://bocowgill.com/GooglePredictionMarketPaper.pdf Cowgill, Wolfers, & Zitzewitz, 2008]. It is interesting to note that the experiment did not only provide the outcome of the future events that were traded, but also an insight in the organization's internal information flows.

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~~== Implementations of Prediction Markets ==~~

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* General Electric's [[Imagination Markets]]

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* [[Hubdub]]

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== Resources ==

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@@ Line 9: / Line 9: @@
 == Introduction ==
 We can trace the origins of the Prediction Markets concept to the works of [http://en.wikipedia.org/wiki/Friedrich_Hayek Friedrich Hayek], the winner of the Nobel Prize in Economics, and a social and political philosopher. Hayek claimed that the price mechanism serves to share and synchronize local and personal knowledge, allowing society's members to achieve diverse, complicated ends through a principle of spontaneous self-organization.
+We are now starting to witness the proliferation of Information Markets into the corporate decision-making environment. One of the pioneering organizations to use Prediction Market as an internal decision-support tool is Hewlett Packard, which is using it as a sales forecasting tool. Intel too is using Information Markets for managing products forecast and production plans. There is evidence that many other organizations like Google, Eli Lilly and Microsoft are jumping into the water, but most of this activity is still in an experimental stage. Organizations are still trying to figure out the kind of incentives to be used, how to make sure that established hierarchies are not threatened and how to maintain a cost effective process etc.
 == What are Prediction Markets used for? ==
@@ Line 106: / Line 108: @@
 === Judgment biases ===
-== Corporate Prediction Markets ==
-We are now starting to witness the proliferation of Information Markets into the corporate decision-making environment. One of the pioneering organizations to use Prediction Market as an internal decision-support tool is Hewlett Packard, which is using it as a sales forecasting tool. Intel too is using Information Markets for managing products forecast and production plans. There is evidence that many other organizations like Google, Eli Lilly and Microsoft are jumping into the water, but most of this activity is still in an experimental stage. Organizations are still trying to figure out the kind of incentives to be used, how to make sure that established hierarchies are not threatened and how to maintain a cost effective process etc.
-=== Examples ===
-==== Google ====
-As posted in the [http://googleblog.blogspot.com/2005/09/putting-crowd-wisdom-to-work.html Google official blog] on September 2005, a prediction market was set up inside the company with the intention of forecasting product launch dates and other things of strategic importance to Google. More than a thousand Google employees bid on 146 events in 43 subjects. This was developed as one of the projects under Google's policy of employees spending 20% of their time developing whatever new ideas they find interesting. Recently the results 2.5 years running the experiment were published [http://bocowgill.com/GooglePredictionMarketPaper.pdf Cowgill, Wolfers, & Zitzewitz, 2008]. It is interesting to note that the experiment did not only provide the outcome of the future events that were traded, but also an insight in the organization's internal information flows.
-== Implementations of Prediction Markets ==
-* General Electric's [[Imagination Markets]]
-* [[Hubdub]]
 == Resources ==