Exago was awarded, on 21 October, a patent by the US Patent Office for a model that reduces purely speculative trading in prediction markets, such as the ones used in idea market platforms. This model encourages relevant participation and promotes the best process output in idea management initiatives.
Processing high volumes of information, prediction markets are the most efficient way to select the best contributions out of the vast array submitted by participants in idea management platforms. Exago’s system and model lessens the effects of any deliberate attempt to interfere with the free and fair operation of these markets.
At its core, Exago’s method increases the risk of purely speculative or manipulative trading strategies, diminishing their expected payoffs. Thus, participants have fewer incentives to engage in such undesirable strategies, greatly reducing their impact and frequency of use.
Exago’s ‘System and method for adjusting asset value and availability in data records for mitigating speculative trading in a prediction market’ has now been officially recognised as a way to address this problem (patent number 8,868,459 B2).
How does it work?
The transaction control software introduces several methods to mitigate speculative manipulation, working together or independently. Among others, they enclose minimum holding times for operations, profit/loss adjustments selective delays and dynamic user risk profiling that adapts the mitigation mechanism to user behaviour patterns.
Exago´s software platform includes a prediction market mechanism to evaluate large numbers of ideas and insights. Successfully implemented by companies worldwide, the platform harnesses each organisation’s collective intelligence, to find the best solutions and tackle specific business challenges.
Find out more about this patented method here.