YOu're right, this is indeed a challenge. But the benefit is often they're not getting screwed by bad planning, over promising, etc. Afterall, those are the kinds of decisions that really burn people out. Instead, they finally get a chance to have a say. Also, I'd argue all the information you're talking about that is potentially decreasing morale is already out there, it's just not being officially recognized/aggregated. At least this way, it's surfaced, and management understands what the perception is out there and can address it head on.

Bottom line, these aren't for everyone. One of the first questions I ask when someone expresses interest is what their culture is like and how humble their leadership is. If they're ready for it, prediction market can be transformative. But if they're not, they can fail - and we've surely had plenty of those projects too!

You might be right about the self-fulfilling prophecy. But this effect might already be in effect, as people might already have a gut feeling, while nobody cares (or knows) about it.

A trivial instance of this would be release planning in software. After our initial delivery plan my team gives a confidence measure, one release it was quite low, which was an important signal since we could discuss why that was and what we could cut to increase the confidence. Without that signal, we'd have overcommitted, and suspecting as much but without common knowledge might have even delivered less.

You're right. But I think the single-value, hyper-transparent nature of prediction market can create an institutional feedback loop that's more powerful than what arises from the diverse, individually held opinions that others don't know about.