Thursday, April 23, 2009

Google Prediction Markets

Is it a good idea to encourage ALL employees to trade in these markets? Should insiders and/or highly uninformed people be allowed to trade? Do they help or hurt the market?

It appears that the purpose of encouraging all employees to prediction trade is to increase the accuracy of the markets. However, Google project insiders have stated that the market is already quite accurate, and often confirms their own, informed beliefs. Based on that, I'm not sure what value the market has, information wise. Therefore, it may be a waste of time to encourage employees to trade in a prediction market - productivity would decline for no reason.

I don't think that the market should be restricted to certain people (if that's possible). The market is already subject to manipulation based on activity monitors - so it's likely that highly informed and uninformed activity will be lost in the shuffle.

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