Railinc has recently started a prediction market venture using Inkling software. We have been using it internally to predict various events including monthly revenue projections and rail industry traffic volume. In July, we also had markets to predict World Cup results. While this experience has been fun and interesting, I can't claim it has been a success.
The biggest problem we've had is with participation. There is a core but small group of people who participate regularly, while most of the company hasn't even asked for an account to access the software. When I first suggested this venture I was skeptical that it would work at such a small company (just under 200 staff) primarily because of this problem. From the research I saw, other companies using prediction markets only had a small percentage of employees participate as well. However, those companies were much larger than Railinc, so the total number participating was much greater.
Another problem that is related to participation is the number of questions being asked. Since we officially started this venture I've proposed all but one of the questions/markets. While I know a lot about the company, I don't know everything that is needed to make important business decisions. Which brings up another problem - in such a small company do you really need such a unique mechanism to gather actionable information from such a limited collective?
Even considering these problems we venture forward and look for ways to make prediction markets relevant at Railinc. One way to do this is through a contest. Starting on September 1 we will have a contest to determine the best predictor. At the Railinc holiday party in December we will give an award to the person with the largest portfolio as calculated by Inkling. (The award will be similar to door prizes we've given out at past holiday parties.) I've spent some time recently with the CIO of Railinc to discuss some possible questions we can ask during this contest. We came up with several categories of questions including financial, headcount, project statistics, and sales. While I am still somewhat skeptical, we will see how it plays out.
We are also looking to work with industry economists to see if Railinc could possibly host an industry prediction market. This area could be a bit more interesting, in part, because of the potential size of the population. If we can get just a small percentage of the rail industry participating in prediction markets we could tap into a sizable collective.
Over the coming months we'll learn a lot about the viability of prediction markets at Railinc. Even if the venture fails internally, my hope is to make some progress with the rail industry.