I don’t know what rock I’ve been hiding under, but I just came across this post on The Official Google Blog about the prediction market that Bo Cowgill and other employees set up years ago to forecast internal events of strategic importance at Google.  (It  was originally posted back in 2005, but for some reason it came up in my Attensa “River of News” view the other day.)  No payment is required to play at Google, but the market predictions are quite accurate.  According to Cowgill, social and reputational rewards work better; players in his prediction market were “more concerned about their ranking and tee shirts than the large cash prizes awarded. ” (That’s why none of us work for Google.)

The New York Times ran a story last spring about another company running an internal prediction market.  At Rite-Solutions, employees can make proposals for, say, the company to enter a new line of business or make an operational improvement or acquire a new technology.  The proposals become stocks that are bought and sold, and  though employees get funny money to invest, they share in real-money proceeds if the stock delivers.   According to Rite-Solutions management, the market has paid big dividends:  “it removes the terrible burden of us always having to be right…[and] it finds good ideas from unlikely sources.”

Here at DoublePositive, we’re all about the wisdom of markets AND the large cash prizes.  Although we’re growing, our staff is small enough that those buying into the market would themselves decide the outcome, so it would become self-fulfilling…which sort of defeats the purpose.   (If we did have the critical mass to make a prediction market viable, though, you can bet there’d be a whole lotta skin in the game–we have a former professional bookie on staff, after all).  But small as we are, we would benefit greatly from aggregating knowledge and opinions from all corners of the organization.  I’m fired up to create some sort of mechanism to harness that wisdom in a way that encourages everyone to participate.  Any ideas out there?