“Industry expert, market expert, sales expert, technology expert”. These phrases make up just a few of the growing number of “experts” operating in today’s economy. Experts are people who possess a unique or certain set of skills, knowledge and know-how that make them an informational asset to people or organisations seeking understanding and insight. Experts appear regularly on political talk shows, interactive panels discussing climate change and even lend their heralded expertise to predicting sporting events and recommending investment options. Successfully predicted outcomes usually boil down to the superior “expertise” whether serendipitous in nature or not. However, the reign of the expert may be coming to an end with the emergence of prediction markets.
A prediction market is essentially an information market that facilitates the trade of event outcomes. Market prices are usually indicative of how probable the crowd believes a certain event to be (Tziralis, Tatsiopoulos 2007). They aggregate data and information to generate insights. These prediction markets give businesses the opportunity to predict the success of new product launches, prices of certain products and to generate new insight into how information flows around the workplace. Outside of the business context, prediction markets are being used to predict presidential elections and other significant events (Broughton 2013).
It is widely acknowledged that surveys may be superseded by the use of prediction markets as a decision making and information elicitation tool. In fact, many firms have put prediction markets to use internally via incentivised games. Google even created their own currency, called Goobles, which employees could use to make bets on the success of prospective google products. Incentivised by cash and gift rewards, employees set about providing informed information that would allow Google to gather predictive data.
Following the theme of a diminished role for experts and according to Thompson (2012), predictive markets are creating a changing dynamic within organisations. Chief executives are traditionally seen as the main source of information, expertise and direction. Prediction markets challenge this idea because all employees have access to the superior, collective information of the organisation as a whole. The idea unsettles the traditional business hierarchy. As such it slightly reduces the value of the expert. Although it is interesting to note that the role of the expert won’t be made completely redundant. Much of the information companies rely on is informed data and this means that people trading within the information market need a certain level of skill, knowledge and information to be able to give the business any valuable predictive information.
So while field matter experts may not necessarily be made redundant, it is likely that they will need to continue improving what they offer. Being up to date with the latest industry practices, methods and understanding how to coexist in an era where the “crowd” and useful information is more easily collected is more important than ever before.
References
BROUGHTON, P.D., 2013. Prediction markets: Value among the crowd. Financial Times, .
THOMPSON, D.N., 2012. Oracles: How Prediction Markets Turn Employees into Visionaries. Harvard Business Press.
TZIRALIS, G. and TATSIOPOULOS, I., 2007. Prediction markets: an information aggregation perspective to the forecasting problem. World Review of Entrepreneurship, Management and Sustainable Development, 3(3-4), pp. 251-259.
