Are Prediction Markets Ready for Enterprise 2.0?Can they help make better decisions than with traditionals DSS?
Gaspoz, Cédric, "Prediction Markets as Web 2.0 Tools for Enterprise 2.0" (2011). AMCIS 2011 Proceedings - All Submissions. Paper 432.
In today's fast-changing business environment, companies and stakeholders are confronted with a new range of businessdecisions. These decisions are constrained by events that are out of the scope of competencies of the decision makers. In thiscontext, prediction markets, which have demonstrated their efficiency in predicting the outcome of major elections, couldsupport companies in leveraging the knowledge and competencies of their collaborators. Using the power of Web 2.0 and theparticipative collaboration of the crowd, prediction markets are well designed to assess this new range of decisions. Thesimple buy and sell mechanism uses the crowd as proxy toward various information sources. Moreover, the decision task isdistributed between the traders, leaving them the tasks of framing the problem, setting the evaluation criteria and collectingthe supporting information, aggregating their results through the current market price.This paper presents the capabilities of prediction market as Web 2.0 decision making tool to increase the efficiency of thedecision making process in Enterprise 2.0 companies. It relies on many characteristics of these companies such as theenhanced collaboration between dispersed collaborators through social networks tools, the commitment of all collaborators inthe knowledge management process and the dedication of the organization toward open and participatory decision processes.It also have the ability to promptly leverage pieces of information scattered through the organization, without requesting asingle stakeholder knowing what to search for and where to search it. Moreover, due to the engagement of a large crowd inthe decision process, final decisions are subject to a broaden adhesion within the company.We conclude by making propositions regarding the deployment of this decision making tool. This involves numerousmanagerial issues, but also opens new perspectives to build upon the collective knowledge of the enterprise.