Business Administration, Management, and Operations Commons^™

Corporate Prediction Markets For Business Decisions: New Applications, Challenges And Limitations, Jessica A. Zinger

2018

Prediction markets, introduced roughly 30 years ago, are a way to leverage market pricing for information aggregation. Research has shown the markets provide accurate (often superior) forecasts. To date, research has been predominately of an economic nature. Despite numerous articles on the application of prediction markets in businesses (Hewlett-Packard, Google) the management literature has largely ignored the topic. This dissertation follows a three-paper model to begin to address the perceived gap.

Paper one introduces a new application of the market, namely its use as a determinant of employee compensation packages. Employers often claim to utilize a pay-for-performance model. However, principle-agent …