The imagination market – by Christina Ann LaComb, Janet Arlie Barnett and Qimei Pan – 2007-03-10
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.