Enterprise Prediction Markets = The wisdom of crowds comes to the enterprise.

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Here are short excerpts of the Forrester report on enterprise prediction markets and companies that provide software for enterprise prediction markets (e.g., Consensus Point &#8211-see the full list of providers at the bottom of this post).

The Forrester executive summary:

The &#8220-wisdom of crowds&#8221- is capturing the attention of corporate strategists across the globe, and, as a result, many are now looking to prediction markets — speculative markets in which traders collectively predict future events — to generate collective intelligence. For enterprises, prediction markets bring unique value: They focus on the future, aggregate diverse information pools that can be applied to multiple decision-making domains, create streams of actionable data suitable for executive decision-making, and can often cut through corporate politics and pressures at lower cost than traditional forecasting methods. Market researchers will, however, need to have an active hand in the management of these mechanisms, ensuring strong management support, the right incentives for traders, and a focus on appropriate questions. When executed properly, the value to the enterprise is enormous- as a result, Forrester believes that prediction markets will ultimately find a permanent home in the market research toolbox.

For information on hard-copy or electronic reprints, please contact the Client Resource Center at +1 866.367.7378, +1 617.617.5730, or resourcecenter &#8211-at&#8211- forrester &#8211-dot&#8211- com. We offer quantity discounts and special pricing for academic and nonprofit institutions.

My remark about the Forester report:

– It&#8217-s a very good document.

APPENDIX #1: Prediction Markets – DRM Review


Here is a list of companies that provide software for prediction markets:

Inkling Markets – (MSR + AMM)

NewsFutures – (CDA + optional AMM + SR)

Consensus Point – (CDA + MSR + AMM)

Xpree – (MSR + AMM)

Zocalo – (CDA + MSR + AMM) – (open-source)

Nosco – (CDA + MSR + AMM)

QMarkets – (MSR + AMM)

Ask Markets – (MSR + AMM)

Exago Markets – (CDA + optional AMM)

Gexid – (?)

ProKons – (?)

Spigit – (?)

HSX Virtual Markets – (Virtual Specialist + AMM)

HubDub – (MSR + AMM) – (not licensed)

Yahoo!&#8217-s Prediction Exchange – (MSR + AMM + DPMM) – (not licensed)

Google&#8217-s Prediction Exchange – (CDA) – (not licensed)

MicroSoft PredictionPoint – (MSR + AMM) – (not licensed)

InTrade – (CDA + AMM for play money) – (not licensed)

TradeSports – (CDA + AMM for play money) – (not licensed)

Iowa Electronic Markets – (CDA) – (not licensed)

HedgeStreet – (CDA) – (not licensed)

TradeFair – (CDA) – (not licensed)

BetFair – (CDA) – (not licensed)

Trading Technologies International – (CDA) – (not for event derivatives)

Here&#8217-s a list of prediction market consultants:

Robin Hanson – (George Mason University, Virginia, U.S.A.)

  • Robin Hanson does prediction market consulting work, and have no exclusive arrangements.
  • &#8220-I&#8217-m more interested in helping groups that want to add lots of value to big decisions, versus groups that just want to dabble in a new fad.&#8221-

Inkling – URL: Inkling Markets – (Chicago, Illinois, U.S.A.)

  • Adam Siegel
  • Nathan Kontny

NewsFutures – (Maryland, U.S.A. &amp- Paris, France, E.U.)

  • Emile Servan-Schreiber — Post Archive at Midas Oracle
  • Maurice Balick

Consensus Point – (Nashville, Tennessee, U.S.A. &amp- Calgary, Alberta, Canada)

  • David Perry
  • Ken Kittlitz, who co-founded the Foresight Exchange in 1994.

Xpree – (California, U.S.A.)

  • Mat Fogarty

Chris Hibbert – (California, U.S.A.)

  • Chris Hibbert (Software architect / Zocalo project manager) — Post Archive at Midas Oracle
  • Chris Hibbert&#8217-s personal website — Chris Hibbert&#8217-s personal blog —
  • Chris Hibbert&#8217-s CommerceNet profile — (His stint there ended in mid 2006.)

Justin Wolfers – (University of Pennsylvania&#8217-s Wharton Business School, Pennsylvania, U.S.A.)

  • Justin Wolfers takes on prediction market consulting work.
  • The prediction market industry is &#8220-a case where the interaction between firm practice and academic research are reasonably close.&#8221-

Koleman Strumpf – (University of Kansas, Kansas, U.S.A.)

  • Koleman Strumpf — Post Archive at Midas Oracle
  • Koleman Strumpf can be approached to consult on prediction market projects.
  • &#8220-Prediction markets help harness the knowledge of diverse groups. They have great potential as a tool for industry.&#8221-

Nosco – (Danemark, E.U.)

  • Jesper Krogstrup
  • Oliver Bernhard Pedersen

Qmarkets – (Israel)

  • Noam Danon

Ask Markets – (Greece, E.U.)

  • George Tziralis — Post Archive at Midas Oracle

HP Services &amp- HP Labs – (U.S.A.)

  • Predicting the future &#8211-with games — Introductory article
  • Information Dynamics Lab — Internal prediction markets
  • BRAIN – (Behaviorallly Robust Aggregation of Information in Networks) — Scoring Rules (i.e., non-trading technique)
  • Bernardo A. Huberman – Bernardo Huberman – Senior Fellow &amp- Director
  • Kay-Yut Chen –
  • Google Search for &#8220-prediction markets&#8221-

Hollywood Stock Exchange (HSX) &amp- HSX Research – (L.A., California, U.S.A.)

  • Prediction market consultancy firm
  • Movie business

IntelliMarket Systems – (L.A., California, U.S.A.)

  • Charles R. Plott – Charles Plott – (CalTech Inst., California, U.S.A.)

Gexid – Global Exchange for Information Derivatives – (Germany, E.U.)

  • Bernd Ankenbrand — Post Archive at Midas Oracle

ProKons – (Germany, E.U.)

  • Peter Gollowitsch

Exago Markets – (Portugal, E.U.)

  • Pedro Da Cunha

NimaniX – (Israel)

  • Elad Amir (CEO), Littal Shemer Haim (VP Business development), David Shahar (VP R&amp-D)

Michael Giberson – (Texas, U.S.A.)

  • Michael Giberson (Energy Economist – Center for Energy Commerce, Rawls College of Business, Texas Tech University) — Post archive at Midas Oracle
  • Knowledge Problem – Blog on economics, energy policy, more.

Other Consulting Firms

McKinsey – (U.S.A.)

  • Google Search for &#8220-prediction markets&#8221-
  • The Promise Of Prediction Markets – by McKinsey – 2008-04-XX

Accenture – (U.S.A.)

  • Google Search for &#8220-prediction markets&#8221-

Gartner – (U.S.A.)

  • Google Search for &#8220-prediction markets&#8221-

Forrester – (U.S.A.)

  • Google Search for &#8220-prediction markets&#8221-
  • Prediction Markets: Wisdom Of The Crowd Comes To The Enterprise. – 2008-07-14

The Boston Consulting Group – (U.S.A.)

  • Google Search for &#8220-prediction markets&#8221-

CapGemini – (U.S.A.)

  • Google Search for &#8220-prediction markets&#8221-

KPMG – (U.S.A.)

  • Google Search for &#8220-prediction markets&#8221-

Price Waterhouse Cooper – (U.S.A.)

  • Google Search for &#8220-prediction markets&#8221-

Ernst &amp- Young – (U.S.A.)

  • Google Search for &#8220-prediction markets&#8221-

Deloitte – (U.S.A.)

  • Google Search for &#8220-prediction markets&#8221-

IBM – (U.S.A.)

  • Google Search for &#8220-prediction markets&#8221-

EDS – (U.S.A.)

  • Google Search for &#8220-prediction markets&#8221-

Is Spigit stealing the Best Buy quotes on enterprise prediction markets that does in fact belong to Consensus Point (which is the software vendor that has Best Buy as its customer)?

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Look at the quote at the bottom of this webpage.

UPDATE: They have just brought the Best Buy quote down. :-D

Exago Markets, Portugal, E.U.

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As I understand it:

– Prediction market consultancy in Portugal-

– They probably licensed Xpree&#8216-s software for enterprise prediction markets. UPDATE: They created their own software for enterprise prediction markets.

Best wishes to them.

Questions to InTrade CEO John Delaney about InTrade .NET and InTrade .COM

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– InTrade .NET is a play-money prediction exchange while InTrade .COM is a real-money prediction exchange. Is there an automated market maker linking the InTrade .NET prices (or bids) with the InTrade .COM prices?

– Why is it that you ask the consumers of InTrade .NET to sign the terms of use of InTrade .COM, which mentions that: &#8220-2.2.4 You may lose money on Exchange trades.&#8221-? – [Thanks to Deep Throat for that remark.]

– InTrade .NET has a very good charting system. Will the same charting system be implemented at InTrade .COM whose charts are absolutely awful? (See this comparison between the InTrade .COM charts and the InTrade .COM v2 charts.) I insist to say that this should be a priority.

– Will InTrade .NET have chart widgets, just like InTrade .COM and InTrade .COM v2 both have?

– Will InTrade .NET have closed contracts (which are very useful in the accuracy discussions), just like InTrade .COM and InTrade .COM v2 both have?

– Finally, it is stated on the InTrade .COM frontpage (in a text promoting InTrade .NET) that:

When Intrade.net goes out of beta it will become the new default but the current version of Intrade.com will be retained indefinitely.

How should we understand that? Does this mean that you are going to merge your play-money and real-money prediction exchanges? (Might not be a bad idea provided that full information is given on each prediction market.)

UPDATE: Deep Throat tells me that their techies are testing their new user interface on InTrade .NET, which deals with with play money, and then if everything works out well, they may implement the same user interface on InTrade .COM, which deals with real money &#8212-while maintaining the legacy InTrade .COM on a dedicated server, for the nostalgic users.

The InTrade .NET charting system is a great improvement for prediction market journalism.

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One word: FANTASTIC.

Much improved.

  1. A prediction market blogger can hot-link to the advanced chart.
  2. The advanced chart is the by-default chart &#8212-both prices and volumes are chartered. [Thin volumes don’t appear, though.]
  3. The advanced chart is of the right width &#8212-not too small, not too big.

What remains to be improved:

  1. InTrade should publish chart widgets, so that the weblink to the prediction market webpage is automatically embedded in the chart.
  2. InTrade should publish expired charts of the closed prediction markets. Discussions about accuracy should be supported visually.
  3. InTrade should develop dynamic compound chart widgets with customizable news markers.

I hope we will get improvement on these fronts, soon.


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Google PageRank of the main Prediction Market Consultants

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Inking Markets and NewsFutures are graded 6 / 10.

Consensus Point and Xpree are graded 5 / 10.

My great friend David Perry of Consensus Point is making a strategic mistake by insisting on discretion and secrecy.

I told him 10 times.

To no avail.

Pissing in a violin in order to create a symphony would have been more fruitful.

PageRank is important.

One day, we will learn in the Wall Street Journal that a Fortune-500 CEO is fired by the board for a low PageRank.

That will happen one day- you will see.

The Prediction Market Consultants

Excellent article about enterprise prediction markets and Inkling Markets -with a good word for Robin Hanson, who invented MSR.

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Via Daniel Horowitz (Business and Technology Consultant)

Software taps into the zeitgeist to predict the future.

Previous blog posts by Chris F. Masse:

  • No Trades (other than at the start) —-> Not a reliable predictor, as of today
  • How you should read Midas Oracle
  • The best prediction exchanges
  • “There will be no media consumption left in ten years that is not delivered over an IP network. There will be no newspapers, no magazines that are delivered in paper form. Everything gets delivered in an electronic form.”
  • Hillary Clinton won’t be on the Democratic ticket. — It’s not going to happen. — N-E-V-E-R. — Not a chance. — Period.
  • Suggestion for WordPress — Subscribers’ Capabilities
  • This is why I said that those who believe that Hillary Clinton has a chance to be on the Democratic ticket are “clueless”.