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I recently got to spend ten minutes explaining prediction markets to a (nice, smart) software billionaire. He had already been exposed to the basic idea, but from me he came to understand the larger potential for markets on decision consequences. He said they could be useful inside for-profit firms, like hedge funds. I suggested that software firms could also benefit from better estimates on user satisfaction, rates of bugs, and making deadlines. He quickly countered that software visionaries, in charge of implementing an unusual vision, shouldn’t be held to the conventional wisdom of a crowd.
The conversation moved before I could reply that prediction markets aren’t about crowds or conventional wisdom, and that even unconventional concepts can gain from grounded estimates on their implementation details. Alas this seems another example of the usual excuse making; even those who see big gains from prediction markets elsewhere tend to find excuses for why such gains are not to be found in their organization.
Grounded Visionaries
To my knowledge, the Microsoft prediction market was not controlled by management, nor was it widely gamed. Neither did it fail to work. It did, however, fail to catch on, and that is important.
> and whose reasoning would be well guarded information, and with investors that can buy a move, publish something influential, and then sell a move.
Yep. What's the problem? They reveal their information as they buy up shares of that move. That's the whole point!