LordsOfOdds - Prediction Markets

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Prediction Markets

What are Prediction Markets

Prediction markets are speculative markets created for the purpose of making predictions.

Virtual stocks are created whose final value is tied to the outcome of a particular event (e.g. will India win a cricket match) or parameter (e.g. total sales next quarter).

The current market prices can then be interpreted as predictions of the probability of the event or the expected value of the parameter.

Read more at: http://en.wikipedia.org/wiki/Prediction_market

Corporate Applications

Sales Forecasting

Strategic Commodity Price Forecasting

New Product Development

Resource Allocation

Projection Completion Estimates

Industry Trend-spotting

Gauging Consumer Interest

Who is currently using Prediction Markets

Arcelor Mittal	-	to predict sales of hot-rolled steel
Hewlett Packard	-	to predicting prices of DRAM chips
General Electric	-	to generate new product ideas from employees
British Petroleum	-	to efficiently allocate resources for reducing green-house gas emissions
Google	-	to predict product launch dates
Microsoft	-	to predict number of bugs in a software
Eli Lily	-	to gauge consumer sentiments and better understand market trends

NOTE: None of the above mentioned companies are using Prediction Markets developed by LordsOfOdds. They are mentioned here just as an illustrative example of the possible applications of such markets.

Media Coverage on Prediction Markets

Businessweek Magazine
http://www.businessweek.com/technology/content/aug2006/tc20060803_012437.htm

TIME Magazine
http://www.time.com/time/magazine/article/0,9171,1118373,00.html

New York Times
http://www.innocentive.com/about/media/NYTimes_reprint.PDF

Accenture Research
http://www.accenture.com/Global/Research_and_Insights/
Outlook/By_Alphabet/LeadingInvisibleHand.htm

CNN.com
http://money.cnn.com/magazines/business2/business2_archive/
2006/09/01/8384339/index.htm

Wired Magazine
http://www.wired.com/wired/archive/12.06/view.html?pg=2

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