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Unformatted text preview: ecause these relatively ho mo geneo us clusters o f users bro ught the same inf o rmatio n to
the table (yet ano ther reaso n why o rganizatio ns sho uld hire and cultivate diverse teams). Many f irms run predictive markets to aid in key f o recasts, and with the po tential f o r real f inancial
payo f f . But University o f Chicago law pro f esso r To dd Henderso n warns predictive markets may
also ho ld legal and ethical challenges. The Securities and Exchange Co mmissio n may lo o k askance
at an emplo yee who gets a heads-up in a predictive market that says a certain drug is go ing to be
appro ved o r f ail clinical trials. If she trades o n this inf o rmatio n is she an insider, subject to
pro secutio n f o r explo iting pro prietary data? Disclo sure issues are unclear. Gambling laws are also
murky, with Henderso n uncertain as to whether certain predictive markets will be viewed as an
unregulated f o rm o f betting.R. Dye, “The P ro mise o f P redictio n Markets: A Ro undtable,”
McKinsey Quarterly 2 (2008): 83–93. P ublicl...
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- Winter '14
- The American