An uncertain future – A novel way of generating forecasts has yet to take off. – by The Economist – 2009-02-26
- But although they have spread beyond early-adopting companies in the technology industry, they have still not become mainstream management tools. Even fervent advocates admit much remains to be done to convince sceptical managers of their value.
- Koch says the results so far have been pretty accurate compared to actual outcomes, but stresses that markets are complementary to other forecasting techniques, not a substitute for them.
- A big hurdle facing managers using prediction markets is getting enough people to keep trading after the novelty has worn off.
- Another reason prediction markets flop is that employees cannot see how the results are used, so they lose interest.
- Bosses may also be wary of relying on the judgments of non-experts.
My remarks:
- The recent San Francisco conference (where the reporter from The Economist got his/her tidbits) has been counter-productive. No wonder, since that conference has no editorial line (it is a vendor conference). I told you so.
- The hype about (enterprise and public) prediction markets is not substantiated. I told you so.
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It may be that companies need to learn how to use forecasts before they can learn how to use prediction markets to get good forecasts.