Have you ever heard of "The Wisdom of Crowds?" It's a theory that a large diverse group of people can make relatively accurate predictions of the future. For instance, those contests where they ask you to guess how many jelly beans are in a container, many times if you take all of the responses and average them, you'll end up shockingly close to the actual number.
CNN appears to be using this philosophy with the CNN Political Market. (No jelly beans involved, though.) Think of it as a fantasy political stock market. You sign into the CNN Political Market and get $5,000.00 to start your portfolio. Available for trade are options on a variety of political questions- for instance: Who will be chosen as the Democratic vice presidential candidate?
You can buy “shares” on who you think will be the correct answer. The price of the shares are determined by the market (what percentage of people agree with you.) As other people buy shares on the same issue, the percentage on the person you selected rises or falls which causes the value of your investment to either gain or lose money.
The goal of CNN Political Market is to combine the opinions of a diverse group of people to try and predict the probability of an event occurring or the value of something.
Why is this important? Because more often than not, a diverse group of people or "crowd" will generate a more accurate prediction than an individual or a small group of "like-minded" or "single-discipline" folks.
In business, politics, and culture, this can have big ramifications:
- Predictions often turn out to be more accurate than surveys and polls;
- More accurate forecasts affect how marketing dollars are spent, how many widgets should be built in the first run, etc.;
- Decision making is more democratized, giving everyone input where they may not have had it before;
- Markets can serve as on-going indicators for key performance
The money isn't real and there are no prizes for making your portfolio profitable, but it might be interesting to see how the market opinion shifts from day to day. To give it a try, visit: http://politicalmarket.cnn.com/
The latest CNN All Access podcast features a behind the scenes look at the Republican debate held in California. The podcast is hosted by Debate Executive Producer and CNN SVP David Bohrman.
This week's Mystery Journalist was Gary Tuchman.