Background:

Prediction markets are speculative electronic markets created for the purpose of making predictions. Recently, there has been an increased interest in the possibility of using Such markets to predict certain events or parameter. The current market prices can be interpreted as predictions of the probability of the event or the expected value of the parameter. Other names for prediction markets include information markets, decision markets, idea futures, preference markets, event derivatives, and virtual markets. Evidence so far suggests that prediction markets are at least as accurate as other institutions predicting the same events with a similar pool of participants. The underlying mechanism to achieve this accuracy is the leveraged information aggregation based on the market principle. People with more accurate information about the possibility of a certain outcome will tend to be willing to bet more real or play money and hence give more leverage to the prediction. Idea markets are a special category of prediction markets. Unlike most prediction markets, idea markets are not tied to one particular event or outcome. Instead, the participants try to predict which ideas will at some point in time generate substantial value for their organization.

Summary:

This inventions achieves the instant-price setting by assuming a pre-defined relationship between the quantity of shares in the order and the average share price for that order. This relationship is the price-quantity function. The price-quantity function is the same for each idea or it can be different for different ideas. The function can be of any mathematical type or combination of types. To address the problem that certain information is not optimally reflected in the share price, the present invention also includes a mechanism of weighted parameters to modify the share-price in addition to pure supply and demand. The parameters can be adjusted over time through a learning mechanism to optimize the relationship between the share price and the actual idea value. The method can also include the following features: The relation between the price and the number of investment units is not necessarily the same for each idea. The relationship between the price and the number of investment units is determined based on pre-registration by members of the organization before they are enabled to buy or sell investment units. Members of the organization with access to the ideas have the rights and capabilities to modify the idea description. Each idea can be evaluated by each member of the organization on a number of predefined criteria through a number of predefined scores. A discussion is associated with each idea so that each member of the organization with access to the ideas can provide feedback to the ideas, and such feedback can be provided anonymously. Members of the organization are notified of certain types of events of which they have given prior indication that they want to be notified of. The rank order of those traders that have accumulated the highest value in their portfolio of investments is made known to all members of the organization. An audit trail of changes to each idea is maintained and made visible for all members of the organization with access to the ideas. In accordance with another embodiment of the present invention, a method for generating and evaluating ideas within an organization includes the steps of obtaining a description of the various ideas, allowing members of the organization to invest investment units in one or more ideas, evaluating the ideas based on those investments, and determining the price of those investments automatically, instantaneously based on a set of weighted factors, amongst which is the number of investment units. This method can also include the following features: The weight factors are optimized over time by comparing the priority of selected ideas and their final success within the organization. The relation between the price and the number of investment units is not necessarily the same for each idea. The relationship between the price and the number of investment units is determined based on pre-registration by members of the organization before they are enabled to buy or sell investment units. Members of the organization with access to the ideas have the rights and capabilities to modify the idea description. Each idea can be evaluated by each member of the organization on a number of predefined criteria through a number of predefined scores. A discussion is associated with each idea so that each member of the organization with access to the ideas can provide feedback to the ideas, and such comments may be made anonymously. Members of the organization are notified of certain types of events of which they have given prior indication that they want to be notified of. The rank order of those traders that have accumulated the highest value in their portfolio of investments is made known to all members of the organization. An audit trail of changes to each idea is maintained and made visible for all members of the organization with access to the ideas. In accordance with another embodiment of the present invention, a method and apparatus for generating and evaluating ideas within an organization includes a memory; at least one processor and an application, which operate to obtain a description of the various ideas, to allow members of the organization to invest investment units in one or more ideas, to evaluate the ideas based on those investments and to determine the price of those investments automatically and instantaneously based on a set of weighted factors, amongst which is the number of investment units; and a storage facility, which stores records of the various ideas, records of the various members of the organization and records of the investments the members of the organization have made in the various ideas.

Benefits:

- A system for recording, managing, improving and evaluating ideas

Applications:

- Start-ups

- Emerging markets

- Unexplored business domains

Full Patent: A Method And Apparatus Forgenerating And Evaluating Ideas In An Organization