Gambling, Predictive Markets, and Product Development

I read an article on Yahoo News a while back about predictive markets.  The basic concept is that markets of ideas can be set up in which individuals bet on those ideas either through wagering or through trading fictional shares in those ideas.  The markets will rank the merit of each idea based on individuals beliefs and experiences.  The collective pricing of the market can make accurate predictions.  Some examples from the article were:

1) A system of placing bets on various price ranges for DRAM at HP.  Based on the results of the betting, the future price of DRAM can be predicted

2) Managers in a research group at GE set up a trading market of new research and product ideas.  An idea was selected for a research grant based on which was the highest priced by the market.  The market was traded by the scientists and engineers in the department

3) In the late 1800s betting on presidential elections was very popular and was a very accurate predictor of the outcomes of elections

The basic concept is that the wisdom of everyone is collected in a market to set very accurate prices for the items in the market.  One book that would be interesting to read on this subject is by James Surowiecki called The Wisdom of Crowds.

I would also like to explore the use of this concept in making design, architecture, or requirement decisions for product development projects.  Hopefully more to come on this...