Unformatted text preview: ncyclo pedias Go Head to Head,” Nature 438, no . 15 (December 14, 2005): 900–
901. The cro wd isn’t always right, but in many cases where to pics are co mplex, pro blems are large, and
o utco mes are uncertain, a large, diverse gro up may bring co llective insight to pro blem so lving that
o ne smart guy o r a pro f essio nal co mmittee lacks. One technique f o r leveraging the wisdo m o f
cro wds is a predict ion market , where a diverse cro wd is po lled and o pinio ns aggregated to f o rm
a f o recast o f an eventual o utco me. The co ncept is no t new. The sto ck market is arguably a
predictio n market, with a sto ck price representing co llective assessment o f the disco unted value o f
a f irm’s f uture earnings. But Internet techno lo gies are allo wing co mpanies to set up predictio n
markets f o r explo ring all so rts o f pro blems. Co nsider Best Buy, where emplo yees are enco uraged to leverage the f irm’s TagTrade predictio n
market to make f o recasts, and are o f f ered small gif ts as incentives f o r participatio n. The idea
behind this incentive pro gram is simple: the “blue shirts” (Best Buy emplo yees) are clo sest to
custo mers. They see t...
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