The document discusses several experiments comparing predictive markets to traditional market research methods in testing new product concepts and ideas. The experiments showed that: 1) Predictive markets using a diverse crowd of 500 people were as accurate as traditional monadic testing with targeted samples of 100 people in determining consumers' preferences. 2) Predictive markets provided clearer results on which ideas were stronger and weaker compared to traditional methods. 3) Predictive markets created a wider spread in purchase intention scores, making weak concepts easier to identify.

1. Predictive Markets & the Wisdom of Crowds Experiments A Market Research Project by BrainJuicer ® Produced December 2005 The Mind Reading Agency

2. Extraordinary delusions and the Madness of Crowds, Charles MacKay (1841)

3. The Wisdom of Crowds – How the Many Can Be Smarter than the Few, James Surowiecki (2004)

5. Galton’s surprise findings. Collective Guess = 1197 lbs Actual Weight = 1198 lbs

6. How did the market know? Rockwell – Down 3% Lockheed – Down 3% Martin Marietta – Down 3% Morton Thiokol – Down 12%

7. Qu. Is there a more efficient alternative?

8. IEM - The original decision market X 596 Polls (1988 - 2000)  ¾

9. French – Referendum Non 53.6% Oui 46.4% Non 54.9% Oui 45.1% 29 th May – Betting BetFair 30 th May - Result (70% turn out) Non 51.0% Oui 49.0% 28 th May – Polls IPSOS

12. The Experiments Monadic Tests of 3, 10, 15 & 20 ideas, with matched targeted samples of 100 Predictive Markets of 3, 10, 15 & 20 ideas, with diverse ‘crowds’ of 500

13. Predictive Market 1 - UK  A diverse crowd will be as accurate as a targeted sample  A ‘Predictive Market’ will be as accurate as a monadic test  Answering for the market as accurate as answering for oneself Respondent Base Sizes: Monadic = 100 per cell / Predictive Market *No Betting = 507 *** 16 43 J 45 49 I *** 35 54 H *** 28 64 G *** 28 64 F 67 67 UK Norms (top 2 box) 70 74 E 86 78 D 80 81 C + 76 83 B 85 85 A Significant Differences Predictive Market 2* With diverse group of 500 people - *no betting (Top 2 Box Purchase Intent) Monadic Test with matched samples of 100 in the target market (Top 2 Box Purchase Intent) New Product Concepts Top Two Box Purchase Intention Results – Predictive Market 2* Respondent Base Sizes: Monadic = 100 per cell / Predictive Market *No Betting = 507 *** 16 43 J 45 49 I *** 35 54 H *** 28 64 G *** 28 64 F 67 67 UK Norms (top 2 box) 70 74 E 86 78 D 80 81 C + 76 83 B 85 85 A Significant Differences Predictive Market 2* With diverse group of 500 people - *no betting (Top 2 Box Purchase Intent) Monadic Test with matched samples of 100 in the target market (Top 2 Box Purchase Intent) New Product Concepts Top Two Box Purchase Intention Results – Predictive Market 2*