Prediction Markets and the “Trough of Disillusionment”

Andreas Graefe (graefe.andreas@gmail.com)

Foresight: The International Journal of Applied Forecasting, 2011, issue 23, 43-46

Abstract: Foresight’s Spring 2011 issue included Robert Rieg and Ramona Schoder’s article “Corporate Prediction Markets: Pitfalls and Barriers” on the hurdles that must be overcome to properly establish a corporate prediction market (CPM). They enumerated four principal obstacles: (1) identifying the appropriate subject to be forecast; (2) defining the subject clearly enough for people to know what they are betting on; (3) motivating and securing an adequate number of participants; and (4) embedding the CPM within the corporate culture. Their conclusion: only selective use of a CPM would be feasible and practical. In the following response, Foresight’s Prediction Market Editor Andreas Graefe notes that certain of the challenges can readily be overcome, and that a promising role for CPMs lies ahead – if the conditions for success are better understood. Copyright International Institute of Forecasters, 2011

Date: 2011
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