Google bets on value of prediction markets

Google builds largest internal corporate prediction market

Prediction markets are known to forecast the outcome of elections more accurately than polls. Now Google is using an internal prediction market to improve business decisions and learn how employees exchange information.

Basically operating like a stock market, Google's prediction system was designed by its own software engineers and lets employees bet on probable outcomes. Will a project be finished on time? How many users will Gmail have? Who will win the World Series?

With about 1,500 employees making 80,000 "trades" over the past two and a half years, Google officials say it's the largest corporate experiment with prediction markets they are aware of.

Google employees bet "Goobles" instead of real currency, but at the end of each quarter the most successful bettors can win US$1,000 cash prizes or T-shirts.

More importantly, said Google economic analyst Bo Cowgill, the trading system lets the Google hierarchy discover its employees' uncensored opinions.

"If you let people bet on things anonymously, they will tell you what they really believe because they have money at stake," Cowgill said. "This is a conversation that's happening without politics. Nobody knows who each other is, and nobody has any incentive to kiss up."

Cowgill described the prediction market Tuesday at the O'Reilly ETech conference on emerging technology in San Diego. Cowgill and economists from Dartmouth College and the University of Pennsylvania also published a paper on Google's experiment in January.

From a practical standpoint, the Google prediction market gives managers insights that might impact business decisions and which they might not have obtained in any other way. In one example, "the market was predicting that [a project] was behind," Cowgill said. "A manager says what's going on here, . . . starts investigating and finds some glitches."

Join the newsletter!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Jon Brodkin

Network World
Show Comments

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Ratchada Dunn

Sharp PN-40TC1 Huddle Board

The Huddle Board’s built in program; Sharp Touch Viewing software allows us to easily manipulate and edit our documents (jpegs and PDFs) all at the same time on the dashboard.

George Khoury

Sharp PN-40TC1 Huddle Board

The biggest perks for me would be that it comes with easy to use and comprehensive programs that make the collaboration process a whole lot more intuitive and organic

David Coyle

Brother PocketJet PJ-773 A4 Portable Thermal Printer

I rate the printer as a 5 out of 5 stars as it has been able to fit seamlessly into my busy and mobile lifestyle.

Kurt Hegetschweiler

Brother PocketJet PJ-773 A4 Portable Thermal Printer

It’s perfect for mobile workers. Just take it out — it’s small enough to sit anywhere — turn it on, load a sheet of paper, and start printing.

Matthew Stivala

HP OfficeJet 250 Mobile Printer

The HP OfficeJet 250 Mobile Printer is a great device that fits perfectly into my fast paced and mobile lifestyle. My first impression of the printer itself was how incredibly compact and sleek the device was.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?