Briefly evaluate how Google’s Prediction Markets have worked to date. To what extent have the markets been successful or unsuccessful? 250
When the five Googlers got together to start with this project, their main objective was to launch an internal prediction market and test if crowds would make more accurate predictions than individuals’. To determine if this project was a success or not we need to determine our parameters of success. Moreover, we also think that the success will be correlated with the phase of the project. From the case we can see that this project is still going through its first steps, despite the system has been running for seven quarters. To measure success, we need to evaluate; first, how accurately the …show more content…
c) Alignment of Incentives: Volume and diversity are certainly necessary conditions for proper functioning of markets. However, it’s the intent of participation that would dictate the success. All participants should act rationally and make the best risk-adjusted bets. In corporate settings, issues like team dynamics, chances of promotion, personal relationships etc can come in the way of rational bets. The incentives to participate should not interfere with the actual decision-making. Incentives can be aligned with monetary gains, reputation, accomplishments or other non-monetary rewards. And this alignment should be dictated by how a corporate is planning to use markets. Markets have to strike a balance between confidentiality and transparency.
d) Transparency: Finally we think that is really important that the market is transparent and confidential. All of the members need to have the guarantee that their positions are not reveled unless they want to do so. For example if a market opens to determine if a project is going to meet a certain dead line and I think that it will not make it, but the project manager is a friend of mine then I need my position to