Predictive Markets : when collective intelligence beats the bets

Posted on March 14, 2007. Filed under: English |

The subject of this post has very little to do with knowledge design except that it is also a new and more effective way to access knowledge. I am a big fan of The Wisdom of Crowds, the best seller from James Surowiecki, and the science of predictive or prediction markets (see Robin Hanson of George Mason University or Eric Zitzewitz of Stanford University), based on F.A. Hayek's market's theories. We do research at faberNovel on this topic, especially on particular uses of such tools to assess potential of innovations (ideas or projects) or in the more ongoing forecasting tasks that all companies do (especially in yield or revenue management)

This recent TechCrunch post (definitely a good source for info 😉 gives us some info to support the demonstration of effectiveness of such tools, but also gives us another business model : individuals collectively create some value that can be monetized by other individuals (C2C) or by companies (C2B). It is interesting to note how those C2+ business models become more and more numerous as well as powerful, showing once more how the consumer is taking power !!

 

This is great stuff and I will probably tell more soon, with an information visualization angle. For more info you can start on this excellent article from Harvard Business Review or this one from Business Week or the minutes of a recent ConFab meeting at Yahoo! on this subject.

 ADDITION : I recently stumbled upon this graphic animation made using data from a German soccer prediction market which was listed in the nominees of the NetSci07 competition for network dynamics visualization … how one side-subject loops back to the main one 😉

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One Response to “Predictive Markets : when collective intelligence beats the bets”

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“We do research at faberNovel on this topic, especially on particular uses of such tools to assess potential of innovations (ideas or projects) or in the more ongoing forecasting tasks that all companies do (especially in yield or revenue management).”

Looking forward to hear from you.


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