Thursday, July 26, 2007
Prediction Market Trials
byA recent Mercury Research blog listed three key points to consider when testing out internal prediction markets:
- solving a real problem
- starting with a small, diverse group
- keeping it low-profile
All three are very important to a successful prediction market trial, but I would add one more: a way to measure how well they performed.
When selecting your trial business problems, be sure that you choose ones that
- Have a quantifiable “correct” answer
- Have an existing predictor “control group”
Without these strong measurement aspects, it is easy to dismiss the results of the prediction market as “we probably could have done as well using process X instead”. It is only by leveraging your control group and your quantifiable answer that you can demonstrate their value. Remember: prediction markets are still a new and strange idea to many people, and having a demonstrated value will allow you to move them out of a trial phase and increase their adoption company-wide more successfully.
