Ideas Markets: A Literature Review and Classification Scheme

Prediction markets have been positioned in the literature as efficient and scalable information aggregation mechanisms. The increasing interest in the use of market mechanisms to enable decision making has led to attempts to use these mechanisms to stimulate innovation in a number of organisational contexts. These tools, usually referred to as Ideas Markets are seen as a potentially powerful method of sourcing and evaluating new ideas. Whereas traditional Prediction Markets allow participants to trade on the outcome of uncertain future events, Ideas Markets’ provide a platform for the generation and evaluation of ideas through the trading of virtual stocks representing products and concepts. In this paper, we study the evolution of research on Idea Markets though a comprehensive literature review. We develop a classification scheme, which enables thorough analysis of current trends within Ideas Markets research. Our results show that case studies detailing corporate applications of Ideas Markets dominate the current literature. The paper contributes by providing a comprehensive guide to the extant literature on Ideas Markets. This serves a number of purposes, including providing practitioners and academics with a convenient bibliography of the current literature. The issues highlighted by this literature review also serve to both motivate and enable further research.