You either define yourself for the world or the world will define you.
The alternatives - holding the investments at historical book value or having them appraised in the traditional manner - may offer familiar comfort, but they are not suitable for this purpose.
Forecasts and forecasters are essential lubricants to the wheels of global commerce, and prediction markets may very well change them, all for the better.
Before prediction markets, the firm - and specifically its stakeholders - bore the risk of failure if decisions like that were made poorly, whereas now business leaders can manage their upside and their risk with uncanny accuracy. But only if they try.
This is a sign that prediction markets are very close to mainstream adoption, but they will first distance themselves from their gaming bedfellows so that the audit committees of company boards don’t become apoplectic.
I think the potential for information markets is much larger than usually reported. I also think the reluctance to try them is deeper than most want to admit and thus it will take longer to catch on.
Creating any new market requires patience. Even eBay didn’t go from zero to a billion transactions overnight
This is high-level thinking with so many variables and unknowns that one’s experience and intuition must fill the gaps to reach a desired outcome.
The bottom line is managers have to learn to let go and trust that market dynamics - and price discovery in particular - work to their advantage.
This power stems from the very nature of markets as information machines: they both consume and produce information, the latter being an invaluable asset to management as it makes decisions about an uncertain future.