The Google case on prediction markets argues that monetary gain is not very effective at getting people to participate in prediction markets. I think money can be persuasive but the scale has to be sufficient. Google's $10,000 pool was simply to low to motivate many to participate. What did motivate the participants were the prizes that improved their reputation among their peers. Simple t-shirts were more important to the winners of the "10 most active trader" awards than the $1,000 prizes. However if the awards were $50,000 or $100,000 or if there were the ability to earn money without winning an award, motivation to participate would certainly have been higher.
In the context of your typical large company, setting up a prediction market with cash rewards sufficient to motivate is not likely to be an option. For this reason, non-monetary motivation will be the most effective motivating strategy. From Google's example, participants seemed to be motivated to participate because of the bragging rights they would earn by winning one of the prizes. Googlers valued the awards and were proud to win the awards. The challenge for anyone who sets up a prediction market will be creating a sense of value to any awards provided. Participation in the market needs to be exciting and people need to be motivated to participate. Companies can setup non-monetary awards like Google did with t-shirts and quarterly announcements of winners. Companies can also try to make participation a part of the corporate culture. Management can help to instill the need to participate by participating themselves and encouraging their teams to participate. Weekly emails can be sent out which summarize the ongoing results of various markets and the trending of those markets to help get people interested in the life of the markets.
Companies should also not limit their marketplace to company relevant markets. Google created markets for the world cup and NBA Finals. Non-work related market opportunities should help keep employees interested in checking out the various markets that are available.
Re: first paragraph: I think that it would have been hard to justify giving away substantial awards without actually proving usefulness of the project first. Google is a for-profit company; they are known to be a great line on the resume, not for their generous compensations ... :) So I think they wouldn’t agree to give away big prizes… Also, the idea of getting the money without winning - the project uses artificial currency, where the money would come from?
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