Emile Servan-Schreiber (of NewsFutures):

From: Emile Servan-Schreiber
Date: Mon, 15 Jun 2009 22:45:43 +0200
Subject: Re: GE Imagination Market License

That’s pretty funny, considering that the creator of the GE Imagination Market herself concludes in several published papers that “using markets to rank ideas may be no better than other methods of idea ranking,” (1) and that “a survey of market participants yielded mixed results regarding the market’s effectiveness at ranking ideas.” (2) Elsewhere, on [General Electric]‘s own blog, one of those participants details at length the conceptual and practical incoherence of such self-referential “preference markets”. (3)

(1) http://portal.acm.org/citation.cfm?id=1265501
(2) http://www.ingentaconnect.com/content/ubpl/jpm/2009/00000003/00000001/art00004
(3) http://www.grcblog.com/?p=378

Previously: General Electric’s internal betting exchange: The Imagination Market

Information markets [= prediction markets] are typically used as prediction tools, aggregating opinions about the likelihood of future events, or as preference indicators, identifying participants’ product preferences. However, the basic information market concept is more widely applicable. In our experiment, we utilized information markets [= prediction markets] within the domains of idea generation and group decisioning. Participants were allowed to propose ideas regarding potential technology research areas; these ideas were represented as securities on a virtual financial market. Participants were able to trade shares of technology ideas over the course of 3 weeks, resulting in the market identifying the “best” idea as the highest priced security. Our findings suggest that information markets [= prediction markets] for idea generation result in more ideas and more participants than traditional idea generation techniques; however, using markets to rank ideas may be no better than other methods of idea ranking. Additional benefits include providing immediate feedback, allowing visibility of all ideas to all contributors, and being a fun mechanism for consensus building.

UPDATE: Is General Electric Imagination Market a joke?