Tuesday, April 27, 2010

Prediction Markets at Google

This was a very intriguing article. I was unaware of prediction markets, let alone their apparent practical application in corporations. I have mixed feelings, though. While I'm impressed with their accuracy and think there is definitely truth in the "collective intelligence" idea, running effective markets seems like it requires a lot of extra time from employees. And to echo Olympia Press, the VP of the online sales group, there are people whose job it is to answer these kinds of questions and make these determinations using sophisticated forecasting tools. So why use prediction systems as well?
I was incredibly surprised to hear how little the Google employees were motivated my monetary prizes, and were more interested in the social/reputational rewards. At my company, it's hard to get employees to participate in any kind of contest without offering some type of monetary reward or "points" that can be accumulated and traded in for prizes or money. But it's also no secret that Google has a unique culture and that these motivators clearly work well in this culture. I'm just not sure that you could get the same response from other "typical" corporations without different incentives.
I also wondered if Cowgill's proposed strategy of making "confidentiality optional and disclosure by default" would actual deter any people from participating in the markets. If they're not confident that they have adequate information about any of the markets, would they be discouraged from even attempting to participate for fear of having their poor trading history exposed to all of the company? They may choose not to play at all.

1 comment:

  1. I was also surprised at how motivated Google employees were at the thought of social recognition. Much like your company, money seems to be the key motivator where I work.

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