An interesting decision market software product

I recently learned about a company that's been around for a couple of years called spigit, and a fascinating piece of software they produce.  If you're familiar with the term "decision market" or with the book "The Wisdom of Crowds" then you have a great headstart understanding what they do.  If you haven't encountered the term or read the book, I'd explain it like this: the problem they solve is how to harness the brainpower any large company or community has in solving problems.  I'll use an example to try to explain what they do.

Suppose you are running a record company and you want to pick next year's musical artists to produce.  There are thousands of musical acts you could go with but you want to make the best few choices you can, because you can only fund a relatively small number out of those thousands.  In your record company, you've got all kinds of people who know a lot about their piece of the music industry.  So what you do is to use spigit to create a sort of a game: anybody can suggest an artist for the company to produce.  The person who suggests an artist posts to the spigit collaboration site with whatever info she wants to post that will get people to vote yes on that artist.  Other people can vote yes or no on that artist; they can post additional information about that artist (maybe a reason why to support or not support that artist).  Anybody can participate; you end up getting a wide variety of opinions from all around the company, ultimately ending up in a ranked list of artists that the company can produce.

In the meantime, people are voting on artists but also on the opinions and suggestions of other employees, so that employees build up a reputation within spigit.  The higher your reputation, the more your votes tend to count.  Reputation can go up or down; you can build up your reputation but you can also ruin it.

There's a lot more to spigit, but this is the basic idea.  The application does a nice job of combining current web 2.0 kinds of technologies and adding the concept of prediction / decision markets.  It's worth checking out if you want to make the best use of the collective intelligence of a community of people.

It looks like there are some open source prediction market packages as well; I'll have to check those out and see what they can do compared with spigit.

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