Securities Trading of Concepts ( STOC ) [ Running title

Market prices are well known to efficiently collect and aggregate diverse information regarding the value of commodities and assets. The role of markets has been particularly suitable to pricing financial securities. This article provides an alternative application of the pricing mechanism to marketing research using pseudo-securities markets to measure preferences over new product concepts. Surveys, focus groups, concept tests and conjoint studies are methods traditionally used to measure individual and aggregate preferences. Unfortunately, these methods can be biased, costly and time-consuming to conduct. The present research is motivated by the desire to efficiently measure preferences and more accurately predict new product success, based on the efficiency and incentive-compatibility of security trading markets. The article describes a novel market research method, provides insight into why the method should work, and compares the results of several trading experiments against other methodologies such as surveys, concept testing and conjoint analysis. Various summary metrics for stock prices are compared based on predictive accuracy, as are alternatives game objectives on the part of the traders.