The value of collaboration is that it allows you to pool the information resources of the participants and to make informed decisions based upon this pooled information. For any given group of people, there is some information that is dispersed smoothly among them, like cream in coffee. There is also information that is not dispersed smoothly, but is clumped and lumpy, like cottage cheese. One person knows this fact and another person knows that fact and no single individual knows all there is to know about any given topic. In theory, at least, collaboration pools this unevenly distributed knowledge and provides a better basis for decision making.

In real life, things don't always work out this way. Team-based deliberation is not nearly as successful in practice as it is in theory and the reason for this is that the idiosyncratic knowledge of individuals does not always get shared with the group. The theoretical pooling of knowledge never actually takes place or, if it does, some information is given more weight than it deserves and bad decisions are made. Psychological and sociological factors intervene and limit the effectiveness of group decision-making.

Web 2.0 technology offers us various tools for improving the collaborative process so that better decisions can be made. Furthermore, these tools do not simply pool dispersed information in an efficient manner, they also provide a fertile environment in which altogether new information can be discovered.

Wikis are perhaps the most commonly identified collaborative technology associated with Web 2.0. The success of Wikipedia has lead to numerous new initiatives aimed at leveraging the power of wikis to capture knowledge. Specifically, wikis are often seen as tools to aid in the capture of tacit knowledge, the kind of kind of knowledge learned from experience and not by reading a textbook or manual.

Another tool has arisen in recent years that is catching the attention of many corporations. Prediction markets (or information markets) while not new, are certainly newly in fashion because they are proving to be particularly well-suited to pooling the knowledge that is dispersed among individuals. Prediction markets work like the stock market except that instead of dealing in stock, they deal in predictions. While they can operate differently, the basic structure is that the outcome or future state of some event is traded among buyers and sellers. In other words, people place bets on the future. They more accurate they are, the better the payoff. When all is said and done, the price that a particular future is trading for represents the probability of that future event, according to the participants in the market.

Prediction markets are collaborative in the sense that they, too, aggregate and pool the collective knowledge of the participants, much like a work team does, and not unlike the collaborative editing process of a wiki does. There is one significant difference, though, and it is that the individuals place bets based upon their own idiosyncratic information, but they don't actually have to share that information with anyone. it's embedded in the choices they make in terms of buying and selling futures. Collectively, all of this idiosyncratic knowledge is aggregated into the "market price" of the future being traded and bypasses all the psychological and sociological barriers that exist for individuals to share such information in a more traditional setting.