Terry's MBA 734 Blog

Is it a good idea to encourage ALL employees to trade in these markets? Should insiders and/or highly uninformed people be allowed to trade? Do they help or hurt the market?

I think that the aggregate of information leads to anonymity in the same way as statistical information. So the more users that participate in the prediction markets the less likely you are to notice that someone from a Google division with inside knowledge is trading on a sure thing. Additionally for an insider to make lots of goobles they have to bet against the market on a sure thing but it would be hard not to have information slip out about projections and thus they would end up betting the same way as most other traders. I think overall they can hurt the market by spreading misinformation while betting correctly but they may give guidance to ambiguous markets.