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- Title
New Product Blockbusters: THE MAGIC AND SCIENCE OF PREDICTION MARKETS.
- Authors
Teck-Hua Ho; Kay-Yut Chen
- Abstract
The article discusses the use of prediction markets in launching new products. Due to the massive expenditures by companies on research and development (R&D) of new products and innovations, companies should ensure that only the most successful product ideas make it to launch. Prediction markets provide financial incentives to participants for the accuracy of their predictions, removing problems associated with the accuracy of consumer surveys and experts' panels. The Iowa Electronic Market run by the University of Iowa Tippie College of Business has focused on predicting the outcomes of presidential elections. The operations of the market and its rules and incentives are discussed.
- Subjects
PRODUCT launches; FORECASTING; ELECTION forecasting; BUSINESS forecasting; UNIVERSITY of Iowa; PLANNING; MARKETING strategy; NEW product development
- Publication
California Management Review, 2007, Vol 50, Issue 1, p144
- ISSN
0008-1256
- Publication type
Article
- DOI
10.2307/41166420