Once again the power of Prediction Markets was displayed last week, as it correctly predicted 19 out of the 24 winners at the 2015 Oscar awards; an accuracy level of 79%. This blog that tracked the predictions of 18 pundits, found that only three pundits got 19 or more correct, with almost 80% of the pundits making less than 18 correct predictions. This is compelling evidence for the argument that harnessing collective intelligence can be more accurate than expert opinion, at least when it comes to the Academy Awards.
Prediction Markets are speculative markets that are created with the purpose of making predictions. This principle was arguably embodied for the first time by the Iowa Electronic Markets, a not-for-profit system that is used for research and educational purposes. The IEM platform was introduced during the 1988 US presidential election, however more recently companies such as Google and Hewlett-Packard have utilised this principle with great success
At Qmarkets, we offer an advanced Prediction Markets tool that allows organizations of all shapes and sizes to create a virtual stock market, and to benefit from the predictions that it generates. While this system is very effective at predicting the results of Hollywood award ceremonies, its potential uses extend far beyond this – particularly in the realms of innovation management, continuous improvement, and tech scouting.
One of the most effective ways of using Prediction Markets is when forecasting success. This can be the success of a new market offering or commercial venture, or it could be an idea for a change in environmental policy that has progressed through an Idea Management platform. Prediction Markets can be used to pre-emptively ascertain the value of any idea, strategy, policy or action, which makes it an invaluable tool to many of our customers.
While accurately forecasting success by harnessing collective intelligence can be very profitable, it is even more important to accurately forecast and manage risk. Theodore Roosevelt famously said in 1901 that “Americans learn only from catastrophe and not from experience.” While 100 years ago this may have been the case, tools such as Prediction Markets facilitate a level of risk management that allow businesses to avoid catastrophe and calculate the outcome of every commercial action. With any innovation system it is important to involve users from every stage of the product delivery chain, however when it comes to risk management this is essential. There are crucial flaws or dangers within all organisations that only specific and sometimes overlooked audiences are aware of, which is why we give customers complete control over who participates in the system, from 100 users to 100,000.
Prediction Markets facilitate a level of risk management that allow businesses to avoid catastrophe and calculate the outcome of every commercial action.
The reason why the Prediction Markets tool is so effective is that it integrates a virtual currency into the evaluation process, allowing users to either exchange it for prizes or cash! Each user is able to define their investment down to each 0.01$/£, which allows for a level of specificity and control that is unprecedented in any other evaluation method. This type of gamification cultivates a level of engagement in participants that guarantees the most accurate possible answer to any question.
Why Utilize Prediction Markets?
Large corporate organisations choose our versatile Prediction Markets system because they need to make tough decisions where a wrong turn could cost millions. However in relative terms, the value of collective intelligence is just as high for smaller organisations. For example a SME facing stiff competition could use Prediction Markets to calculate the benefit of a risky disruptive innovation, and utilise it to transcend the competition and earn a larger market share.
Whatever the size, geography, or vertical market of the organisation, Prediction Markets is ideal for harnessing collective intelligence to affect real change. What’s more, a Prediction Markets tool is only restricted by the creativity of the people who govern it. So, whether you want to achieve accelerated growth through strategic customer alignment, or predict the results of the football fixtures this weekend, Prediction Markets is the product for you!
If you’re looking to implement a winning strategy for harnessing collective intelligence with prediction markets, don’t hesitate to contact Qmarkets today! Free product demos can also be organized on request.