http://googleblog.blogspot.com/2008/01/flow-of-information-at-googleplex.html Earlier on this blog, we shared some exciting early results from our firm's implementation of prediction markets. At last Friday's meeting of the American Economic Association, we shared the results of a deeper study, "Using Prediction Markets to Track Information Flows: Evidence From Google," that uses prediction markets to show how organizations process information and respond to external events. Here are some interesting findings.........
In fairness, this is not surprising. People closely correlated hold similar opinions and therefore enact information the same way. Geographic location determines information flow and therefore you get a cluster of people thinking the same way. (Why your parents always told you to hang out with winners and not losers, by the way). Consider this - plot this graph against a trading floor. You'd notice the same - big zones of green and pink, all clustered. But then when you look at the floor layout you notice that the green is the bond desk and the pink is the fx desk, and that bonds rallied and the dollar plunged unexpectedly - is that really a true correlation of geography and profitability (or predictive value)? IMHO if you wanted to find out who the star was you should look for the fleck of green in all the pink. That's the independent thinker who is doing his own thing. The converse, is the yutz that needs to get canned....