The imagination market

Abstract

Information markets are typically used as prediction tools, aggregating opinions about the likelihood of future events, or as preference indicators, identifying participants' product preferences. However, the basic information market concept is more widely applicable. In our experiment, we utilized information markets within the domains of idea generation and group decisioning. Participants were allowed to propose ideas regarding potential technology research areas; these ideas were represented as securities on a virtual financial market. Participants were able to trade shares of technology ideas over the course of 3 weeks, resulting in the market identifying the "best" idea as the highest priced security. Our findings suggest that information markets for idea generation result in more ideas and more participants than traditional idea generation techniques; however, using markets to rank ideas may be no better than other methods of idea ranking. Additional benefits include providing immediate feedback, allowing visibility of all ideas to all contributors, and being a fun mechanism for consensus building.

Rate or Trade? Identifying Winning Ideas in Open Idea Sourcing

“…Previous research has shown that prediction and preference markets can produce accurate results in such short trading periods in cases where all users use the market synchronously (Dahan et al 2010(Dahan et al , 2011. This is contrary to our experimental task in which users traded ideas asynchronously, making a longer trading period necessary (LaComb et al 2007, Soukhoroukova et al 2012. The preference market's configuration was adapted to the smaller number of participants.…”

“…Since their first use in 1988, prediction markets have become widely used corporate applications (O'Leary 2013). Today, over 100 organizations have run internal markets, including companies such as General Electric (LaComb et al 2007), Microsoft (Berg and Proebsting 2009), and Google (Cowgill and Zitzewitz 2015). Organizations frequently run markets for predicting sales or project deadlines (O'Leary 2013) in which predictive accuracy has frequently been high (Arrow et al 2008).…”

“…Most researchers explore preference markets as a novel approach to idea evaluation. LaComb et al (2007) and Soukhoroukova et al (2012) show how such markets can be used with employees, while Dahan et al (2011) focus on use by customers. Trading behavior (Spears et al 2009) or design choices such as contract design (Dahan et al 2010), payout structures (Slamka et al 2012) or incentives (Chen et al 2009) have also been investigated.…”

“…27-48, © 2016 INFORMS important in the area of idea evaluation, where we have a variety of evaluation strategies at our disposal. Two IT-based mechanisms are currently used in open idea evaluation: rating scales that represent idea evaluation as a judgment task (e.g., Di Gangi andWasko 2009, Riedl et al 2013) and preference markets that represent idea evaluation as a choice task (e.g., LaComb et al 2007, Soukhoroukova et al 2012). Yet representing a task as judgment-or choice-based brings with it several other critical differences in the IT-based implementation of such an evaluation mechanism.…”

“…The systematic evaluation of early stage product ideas is of paramount importance for organizations (e.g., Girotra et al 2010, LaComb et al 2007, Ozer 2005, Riedl et al 2013, Soukhoroukova et al 2012. Open idea sourcing can only become valuable innovations if ideas can be evaluated in cost-efficient ways while also addressing ideas' increased diversity.…”