A prediction market is a virtual platform which lets the users forecast various important events. One could compare prediction markets to a betting exchange or stock exchanges, but with the difference that not money or stock is being exchanged, but Predictions.

Traditional Crowdsourcing is based on surveys. Companies like Nokia survey their customers about new product concepts and ideas. But Crowdsourcing can also be used differently: to solve quantitative problems. A prediction market aggregates the whole wisdom of the crowd and recalculates it into Predictions.

These markets have their origin in the USA, but more and more European and Asian companies are using this Crowdsourcing method to solve crucial matters, e.g. for demand forecasting

The costs of using and maintaining a prediction software can be up to 90% lower than in comparison to traditional methods. Additionally, the accuracy of the predictions stays and sometimes even rises! Just take a look at the case studies of companies that used Crowdsourcing tools.