There is now a prediction market industry, where I do a lot of consulting, most of which is to private companies. Most of these are on prediction markets, but some are decision markets.
What Robin Hanson does not say to his gullible readers (mostly, young collegians who have no experience of real-life forecasting) is that:
- When you ask any non-ideological researchers, these days, on the value of prediction markets over simpler collective intelligence mechanisms, they tell you either that the benefit is very, very small or that it is non measurable (i.e., it probably does not exist).
- Half of the so-called EMP industry (a microscopic industry that lives on hype and trial balloons, it should be said), which Robin Hanson is so proud to belong to, has abandoned enterprise prediction markets. Notably, NewsFutures (founded by a Robin Hanson fanboy, and advised for years by Robin Hanson himself) and CrowdCast (a VC-backed venture) have (independently of each other) decided to stop selling proposing EPM SaaS only to customers, and focused instead on simpler and more social mechanisms. For more information, I recommend my readers to go conversing with Emile Servan-Schreiver of NewsFutures, who has a lot to say about this issue. Emile is well versed into both the research and the practical sides of collective intelligence used within companies. [UPDATE: See Emile's comment.] Mat Fogarty (who, him, as experience in real-life forecasting for business) and Leslie Fine (a scientist) of CrowdCast are also good interlocutors.
Contrary to Overcoing Whatever, Midas Oracle publishes both the good and the bad about prediction markets. We do not censor the bad news. We do not cherry-pick the good news. You will notice, in the near future, that we will publish information that supports the opposite thesis (that is, EPMs are the panacea), and then we will link to Inkling Markets as the best interlocutor in town. We try to publish about both sides (EPMs are no good, EPMs are good), not because we are “bi-polar”, but because the jury is still out on this matter, and our readers need to have both arguments put under their very nose. Act one today.
NewsFutures has absolutely not decided to stop selling EPM SaaS to customers. Our position is that a variety of tools and approaches are needed to deal efficiently with a variety of business forecasting problems and contexts. One-size-fits-all doesn’t work. PM is one tool among many, sometimes the best one to use, often not. A vendor who proposes only one tool/approach, whether PM or something else, is unlikely to deliver the right solution most of the time.
Emile, I have corrected the text. Thanks.
It can be said that NewsFutures and CrowdCast, who once were focused on EPMs, are now mainly proposing non-trading mechanisms to their corporate customers. EPMs remain of course on the shelves, but it is not what is put forward under the nose of the prospects and customers.
Chris, in the context of that discussion I meant “prediction market” to also cover the related collective forecasting mechanisms; I wasn’t trying to make a statement on that topic. I have said many times that the main gain is from collecting forecast track records, and that the other differences are less important. Those other differences are not completely unimportant, however.
May is almost over, yet there has been no launch of CrowdCast’s revolutionary new prediction mechanism. I believe it was originally scheduled for April, then May. Didn’t they run a prediction market on the expected launch date? Did they use a beta version of the new methodology? The “old” technology? Both? Neither? If not, why not? Maybe it was simply that there wasn’t a large enough crowd to predict accurately. At any rate, it doesn’t look good when the prediction company is unable to predict the actual launch date. Certainly, I know how difficult it is to predict such things, but perhaps they should have held off announcing the new program until they knew they would be able to deliver.
Paul,
As an accountant, you never had to deal with computer programmers (or web programmers). The problem is that they are in high demand, and it takes time (and money) to hire a good one. Then, he/she needs a little time to code. CrowdCast was wrong to say they would deliver soon. You always have delays.
Actually, though I am an accountant, I was the president of a software company back in the 80s. So, I *really* do know about software programming. My attempt at accountant’s humor was not so good, obviously. The point was (humorously) that they should not have announced the launch without *knowing* that it would be ready, on schedule. This is *especially* true for a business that involves *accurately* predicting future outcomes! I was jokingly wondering whether they had actually used one of their products to predict the launch date.
P.S. I’ve posted a couple of new blogs on my site that may be of interest.
“This is *especially* true for a business that involves *accurately* predicting future outcomes!”
I sensed the irony.