What is it all about?
Ever heard the phrase "the masses are stupid"? Or the popular saying that "too many cooks spoil the broth"? There is a common belief that too many people can't possibly make the right decision, that difficult issues of decision-making and solution-finding are better left to the experts. Why? Because they have the know-how, the knowledge and the expertise and they're being paid well to do this job.
Well, askmarkets has come to prove these opinions wrong.
askmarkets is a web service for prediction markets, which in turn allow you to thrive on the knowledge of the many. Believe it or not, the combined knowledge of people who know a lot about something, people who know a bit about something and people who just want to guess, often provides a more accurate forecast than any expert or group of experts can give.
Prediction markets are mechanisms which tap into the wisdom of crowds and by using the knowledge of you and me, they arrive at predictions which prove to be more correct, more accurate or more reliable than these of the latest forecast or the experts or the Delphi oracle.
How do prediction markets work?
It's simple really. Prediction markets work like a stock exchange where instead of company stocks, people trade opinions, your knowledge on a particular question or your personal estimate of how something might work out. The same way the market mechanism of supply and demand determines the value of a particular stock and its market price then also reflects the sum of all the traders' knowledge and information, the judgement of the people participating in a particular prediction market influences the possible answer to the question at hand.
For example, someone might want to know the outcome of the next presidential elections. There are two people up for the job. People who subscribe to this prediction market can now trade stock A "Candidate X is going to be the next president" or stock B "Candidate Y is going to be the next president". And by simply letting people make their educated (or not) guess, share information they might have, or use their knowledge or opinion about what other people might think, the sum of all this wisdom is translated into an accurate prediction about the outcome of the next presidential elections.
What can I use a prediction market for?
You can create a prediction market on any possible question, event, idea you want answered, predicted or evaluated. Do you want to know who is going to win the Oscars? Do you want to know whether the book you've written is going to sell more than 1000 copies? Do you want to know how many beans are in a jar? Set up your prediction market today and let people help you find the correct answer (or at least a very close estimate to the correct answer).
And it does not have to stop there - and indeed it does not. Many companies (Microsoft, Yahoo, Google, Siemens, etc.) are using prediction markets to help them in their decision-making. They might want to establish a more exact estimate of how long a project is going to take or which one of the newly developed products has the best chance of making it in the market. They might want to improve their sales forecasts or to get a better prediction on the price of gold. By launching a company-internal prediction market, they can involve more people in the decision-finding process at a much smaller cost. Imagine the sales forecast for a particular book not being determined only by the marketing department, but by a number of different divisions, i.e. the sales department, the sales people in the store, the order department etc. Just because they don't have all the information, doesn't mean they don't know. And imagine not having to go to lots and lots of meetings in order to decide something, but simply having to log onto a prediction market from time to time to give your updated estimate. Prediction markets can quickly and in a very simple way aggregate existing information from a variety of sources and translate it into meaningful answers.
You might be surprised with the outcome - as indeed many of these companies have been simply by tapping into the collective albeit often hidden knowledge of their employees.
Is there real money involved?
No. Our prediction markets are not betting markets. This means that people use virtual money when trading prediction market stocks. Prediction markets after all are about getting a highly accurate answer to a 'hypothetical' question; they don't exist for someone to make a profit out of them. Here ideas, answers, outcomes of future events, [other subjects] are traded, not company stocks or future contracts.
