At Google, employees are encouraged to go online and place bets on a prediction market — an exchange that tries to forecast events based on the money wagered on a particular outcome.
According to the report [by Justin Wolfers, Eric Zitzewitz, and Bo Cowgill], “Using Prediction Markets to Track Information Flows: Evidence From Google,” which was presented Friday at the American Economic Association meeting in New Orleans, the strongest correlation in betting was found among people who sat very close to one another, trumping even friendship or other close social ties.
This is tangible evidence, the authors argue, that information is shared most easily and effectively among office neighbors, even at an Internet company where instant messaging and e-mail are generally preferred to face-to-face discussion.
It is an argument, the authors say, for giving greater importance to “microgeography,” or how people interact in the workplace. The finding that information moved fastest among people who were the closest together is also an endorsement of the company’s “third rule for managing knowledge workers: Pack Them In,” the authors say.
--Noam Cohen, NYT, on the importance of sitting next to smart people