Collective intelligence is a fascinating notion. When many people weigh in with a view, especially if they put money on their positions, the market value of an outcome often predicts very accurately the actual result. According to Inkling Markets “Prediction markets allow a group of people to express an opinion over a period of time about the probability of an event occurring. A question is posed and people buy and sell shares in stocks representing possible answers to that question. The highest priced stock at the end of a period of time is the group’s prediction.”
The company’s Inkling software allows people to create such “markets” of ideas and trade on the likelihood of which ones will win or lose. According to Business Week’s Inside Innovation, March 2007 at 2, the software not only allows employees to put their own ideas on the faux market but also makes it easier to pay people in play or real dollars depending on the outcome of the event.
Law departments might sample this capability. A general counsel, for example, might institute a 360° appraisal process, but allow members of the law department to trade on an internal market based on their estimation of the likelihood of it making a difference (See my post of Feb. 16, 2006 on so-called prediction markets.).