The most precise and especially accurate prediction of uncertain future events is a permanent challenge for companies. Forecast markets address this task by uncovering, evaluating and aggregating relevant information. With this report, we contribute to the assessment of the performance of forecast markets and compile where potential difficulties lie and to what extent solutions are already available. It has been shown that a web-based system with a virtual stock market can efficiently aggregate individual judgments through the price mechanism and is characterized by comparatively low transaction costs and high scalability in terms of the number of possible participants. The operational implementation can be supported by internal marketing before the launch, by the right language, by continuous control of the incentive system and by clear support from top management. Experiences of the economy show the still difficult realization of long-term forecasts via predictive markets, as the optimal incentive scheme for this has not yet been sufficiently researched. In addition, further empirical studies are necessary to make better statements about dealing with speculative bubbles, about the ideal number of tradable shares in parallel and about the calibration of the forecast horizon.

The most precise and especially accurate prediction of uncertain future events is a permanent challenge for companies. Forecast markets address this task by uncovering, evaluating and aggregating relevant information. With this report, we contribute to the assessment of the performance of forecast markets and compile where potential difficulties lie and to what extent solutions are already available. It has been shown that a web-based system with a virtual stock market can efficiently aggregate individual judgments through the price mechanism and is characterized by comparatively low transaction costs and high scalability in terms of the number of possible participants. The operational implementation can be supported by internal marketing before the launch, by the right language, by continuous control of the incentive system and by clear support from top management. Experiences of the economy show the still difficult realization of long-term forecasts via predictive markets, as the optimal incentive scheme for this has not yet been sufficiently researched. In addition, further empirical studies are necessary to make better statements about dealing with speculative bubbles, about the ideal number of tradable shares in parallel and about the calibration of the forecast horizon. Predictive Markets: Ein vielversprechender Weg zur Verbesserung der Prognosequalität im Unternehmen?
The most precise and especially accurate prediction of uncertain future events is a permanent challenge for companies. Forecast markets address this task by uncovering, evaluating and aggregating relevant information. With this report, we contribute to the assessment of the performance of forecast markets and compile where potential difficulties lie and to what extent solutions are already available. It has been shown that a web-based system with a virtual stock market can efficiently aggregate individual judgments through the price mechanism and is characterized by comparatively low transaction costs and high scalability in terms of the number of possible participants. The operational implementation can be supported by internal marketing before the launch, by the right language, by continuous control of the incentive system and by clear support from top management. Experiences of the economy show the still difficult realization of long-term forecasts via predictive markets, as the optimal incentive scheme for this has not yet been sufficiently researched. In addition, further empirical studies are necessary to make better statements about dealing with speculative bubbles, about the ideal number of tradable shares in parallel and about the calibration of the forecast horizon.
The most precise and especially accurate prediction of uncertain future events is a permanent challenge for companies. Forecast markets address this task by uncovering, evaluating and aggregating relevant information. With this report, we contribute to the assessment of the performance of forecast markets and compile where potential difficulties lie and to what extent solutions are already available. It has been shown that a web-based system with a virtual stock market can efficiently aggregate individual judgments through the price mechanism and is characterized by comparatively low transaction costs and high scalability in terms of the number of possible participants. The operational implementation can be supported by internal marketing before the launch, by the right language, by continuous control of the incentive system and by clear support from top management. Experiences of the economy show the still difficult realization of long-term forecasts via predictive markets, as the optimal incentive scheme for this has not yet been sufficiently researched. In addition, further empirical studies are necessary to make better statements about dealing with speculative bubbles, about the ideal number of tradable shares in parallel and about the calibration of the forecast horizon.


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Title: Predictive Markets: A promising way to improve forecast quality in companies?
Authors: Hans-Christian Riekhof, Marie-Catherine Riekhof, Stefan Brinkhoff (2012)

The most precise and especially accurate prediction of uncertain future events is a permanent challenge for companies. Forecast markets address this task by uncovering, evaluating and aggregating relevant information. With this report, we contribute to the assessment of the performance of forecast markets and compile where potential difficulties lie and to what extent solutions are already available. It has been shown that a web-based system with a virtual stock market can efficiently aggregate individual judgments through the price mechanism and is characterized by comparatively low transaction costs and high scalability in terms of the number of possible participants. The operational implementation can be supported by internal marketing before the launch, by the right language, by continuous control of the incentive system and by clear support from top management. Experiences of the economy show the still difficult realization of long-term forecasts via predictive markets, as the optimal incentive scheme for this has not yet been sufficiently researched. In addition, further empirical studies are necessary to make better statements about dealing with speculative bubbles, about the ideal number of tradable shares in parallel and about the calibration of the forecast horizon.