Abstract

The spirit of business intelligence lies at the heart of information markets. This paper advocates the use of information markets as business intelligence tools for decision support. It highlights the market promising potentials, and the business need for collective intelligence in decision making. Market forecasts can reduce uncertainty surrounding business decisions and improve the quality of input into the decision making process, and thus allow managers to make better informed decisions. Further, this paper presents a heuristic for traders’ forecasts of events probabilities. This heuristic extracts additional information from market transactions by incorporating posted, but not yet executed trades. Utilizing pending transactions is hypothesized to generate a more accurate representation of traders’ beliefs than other commonly used measures. It might also boost decision makers’ confidence in the market forecasts, and as a result, encourages them to embrace it, and make the best out of this invaluable tool.

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