Monthly Archives: March 2008

Still crazy bullish after all these years

The growth of interest in prediction markets as decision-making tools continues to accelerate around the world. In the last month alone, we’ve been interviewed on Public Radio (WYPR in Baltimore) about the U.S. presidential primaries, presented at the eFinanceLab conference in Frankfurt, fielded questions from an Executive MBA class in Hong Kong, and spoke at length with a reporter from the Economist and another from a financial magazine in Jordan…

Later this month, on March 25th, I’ll be speaking at the Santa Fe Institute‘s Business Network Workshop in Washington D.C., entitled Control in Distributed Networks (Decisions 2.0: Distributed Decision-making). The workshop will examine “the theory and practice of decentralized and distributed decisions in government, non-profit and commercial organizations.” I’ll present case studies of prediction market use in all these contexts.

In these heady days, it’s good to remember that the current widespread interest in enterprise-class applications of prediction markets was not always there. I remember oh so clearly the DIMACS Workshop on Markets as Predictive Devices that was held at Rutgers three years ago, in February 2005. The other speakers were so downbeat about the penetration of prediction markets in the business world that I felt compelled to change the title of NewsFutures’ late-in-the-day presentation from “Corporate prediction markets: Lessons from the real world” to simply “Bullish!“. How right we were to believe and persevere! But at the time, the business value of prediction markets wasn’t the obvious bet it is today: Three years ago, NewsFutures’ only serious competitors in the enterprise space were Carol Gebert’s Incentive Markets, and Charles Polk’s Common Knowledge Markets, both since defunct. We salute them. These days, in contrast, the “wisdom of crowds” niche has gotten pretty crowded, as new entrants around the world have sought to emulate our success and that of a few other pioneers, thereby helping to create a thriving new industry. We’ve come a long way, baby!

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