Fascinating. The set up:
At Google, employees are encouraged to go online and place bets on a prediction market — an exchange that tries to forecast events based on the money wagered on a particular outcome.
Prediction markets have been used for years to predict things like elections. At Google, they are used, of course, for business. In the last two and a half years, 1,463 employees have made wagers with play money (Goobles, as in rubles) on questions like: will Google open a Russia office? will Apple release an Intel-based Mac? how many users will Gmail have at the end of the quarter?
The pay off:
According to the report, “Using Prediction Markets to Track Information Flows: Evidence From Google,” which was presented Friday at the American Economic Association meeting in New Orleans, the strongest correlation in betting was found among people who sat very close to one another, trumping even friendship or other close social ties.
This is tangible evidence, the authors argue, that information is shared most easily and effectively among office neighbors, even at an Internet company where instant messaging and e-mail are generally preferred to face-to-face discussion.
Link to the report (PDF download)