http://www.dawntkellerconsulting.com/blog/

This blog is not geared toward the existing Prediction Market intelligentsia. While I would be honored to have fellow enthusiasts read and critique this blog, I’m not writing this for them, specifically.

I’m writing for a general business audience, decision makers in particular. The discussion will be geared toward people who may have never heard of Prediction Markets, may be minimally aware and curious, may be knowledgeable but still skeptical, or who may be interested but need help engaging others within their organization.

Dawn Tevekelian Keller’s goal is to evangelize enterprise prediction markets:

This simple but powerful truth is why Prediction Markets could potentially change the course of events for Boeing and its Dreamliner jet. By enabling the company to swiftly and accurately tap its own collective knowledge, [prediction] markets create an intelligence engine with infinite application and shelf life.

All this is gentle, she capitalizes “Prediction Markets” in her posts to make it more respectable, but where is the scientific evidence? The name of her blog “the answer is in the crowd” suggests that she believes that collective forecasting brings a giant-size added accuracy, which is not the case, in fact. People who evangelizes collective intelligence should make modest and humble claims.

Brought to you by Koleman Strumpf (circa November 2007):

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Henry Berg, Microsoft <slides>
Discussant: Robin Hanson (George Mason Department of Economics) <slides>
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Christina Ann LaComb, GE (The Imagination Market; abstract is free, text is gated) <slides>
Discussant: Marco Ottaviani (Kellogg School of Management, Management and Strategy) <slides>
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Dawn Keller, Best Buy (Best Buy’s TAGTRADE Market) <slides>
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Bo Cowgill, Google (Putting Crowd Wisdom to Work) <slides>
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Jim Lavoie, Co-Founder and CEO, Rite-Solutions <slides>
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David Perry, Co-Founder and President, Consensus Point <slides>
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Mat Fogarty, Founder and CEO, Xpree Inc <slides>

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Tom W. Bell, Chapman University School of Law <slides>

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1. David Perry (Consensus Point)

Perry shared many lessons learned, and chose to focus people’s attention on the pitfalls of PMs (in addition to their power).

1. Implementation can take a long time. It’s a change management process.
2. Asking the wrong questions can be a killer, but often the right questions emerge after trading begins.
3. Poor incentive structures is the #1 killer, according to Perry.
4. Don’t suppress the reputational incentives associated with PMs.
5. Be explicit and transparent about how traders will be compensated.

2. Dawn Keller (Best Buy)

Keller began her remarks by explaining how Best Buy management wants to become better at listening. There is an authentic passion for tapping into the best information available among the vast network of Best Buy personnel.

PM offer a powerful tool in this regard. PM fits with the Best Buy mantra of: “Have fun while being the best.”

Keller framed her remarks around how management has tried to educate the Best Buy workforce about PM and the evolution of PM implementation from a committed band of volunteers to senior management buy-in. Best Buy has opted for a “shot gun” approach rather than a “rifle shot” approach. Best Buy tends to run many parallel markets at once to see what sticks rather than trying a few targeted pilots. Consistent with many other speakers, Best Buy runs many non-business related markets to invoke interest and fun, noting that participation is key and must be continually cultivated.

3. Christina LaComb (General Electric)

LaComb set the stage for her comments by noting GE managements desire to implement reliable intelligence aggregation processes. PM offers one such technology.

GE management, to date, has had little interest in the forecasting applications of PM. Rather, they [want] methods for grappling with new technologies and other factors associated with disruptive change. So, in the GE setting PM takes on the nature of “preference markets” rather than “prediction markets.”

LaComb went on to describe lessons learned in the implementation of GE preference markets. Much of this information is available in a published case study.

LaComb stressed that: “Validation is a huge challenge.” To date, the validation most relevant in the GE environment has been “gut checks” from senior management.

Can prediction markets “grapple” with disruptive change, really? I view this forecasting tool as conformist, whereas inventions/innovations require a dose of anti-conformism.

I am pleased to note that Mat Fogarty (Founder and CEO, Xpree) and Alexander Costakis (Managing Director, HSX) have been added to the program.

Please get in touch with me (cigar@ku.edu) if you are interested in attending or have any questions.

Schedule

8:30 Registration, Coffee, Opening Remarks

9:00 Lessons from Corporate Applications of Prediction Markets

Henry Berg, Microsoft

Discussant: Robin Hanson (George Mason Department of Economics)

Christina Ann LaComb, GE (The Imagination Market; abstract is free, text is gated)

Discussant: Marco Ottaviani (Kellogg School of Management, Management and Strategy)

10:45 Coffee Break

11:00 Lessons from Corporate Applications of Prediction Markets (cont)

Dawn Keller, Best Buy (Best Buy’s TAGTRADE Market)

Discussant: Paul Rhode (Department of Economics. Eller College of Management, University of Arizona)

Bo Cowgill, Google (Putting Crowd Wisdom to Work)

Discussant: Eric Zitzewitz (Dartmouth Department of Economics)

12:45 Lunch

Keynote address: Jim Lavoie, Co-Founder and CEO, Rite-Solutions

1:45 Lessons from Prediction Market Organizers and Operators

John Delaney, Founder and CEO, Intrade

David Perry, Co-Founder and President, Consensus Point

Mat Fogarty, Founder and CEO, Xpree Inc

3:15 Break (refreshments)

3:30 The Legal Playing Field

Tom W. Bell, Chapman University School of Law

Discussant: Robert E. Litan (VP Research and Policy at the Kauffman Foundation, Senior Fellow at the Brookings Institution, Director of the AEI-Brookings Joint Center on Regulatory Studies)

4:15 General Discussion

Alexander Costakis (Managing Director, Hollywood Stock Exchange) will also be available to answer questions and may make a short presentation.

The preliminary schedule is listed below:

Schedule

8:30 Registration, Coffee, Opening Remarks

9:00 Lessons from Corporate Applications of Prediction Markets

Henry Berg, Microsoft

Discussant: Robin Hanson (George Mason Department of Economics)

Christina Ann LaComb, GE (The Imagination Market; abstract is free, text is gated)

Discussant: Marco Ottaviani (Kellogg School of Management, Management and Strategy)

10:45 Coffee Break

11:00 Lessons from Corporate Applications of Prediction Markets (cont)

Dawn Keller, Best Buy (Best Buy’s TAGTRADE Market)

Discussant: Paul Rhode (Department of Economics. Eller College of Management, University of Arizona)

Bo Cowgill, Google (Putting Crowd Wisdom to Work)

Discussant: Eric Zitzewitz (Dartmouth Department of Economics)

12:30 Lunch

Keynote address: Jim Lavoie, Co-Founder and CEO, Rite-Solutions

1:45 Lessons from Prediction Market Organizers and Operators

John Delaney, Founder and CEO, Intrade

David Perry, Co-Founder and President, Consensus Point

3:00 Break (refreshments)

3:15 The Legal Playing Field

Tom W. Bell, Chapman University School of Law

Discussant: Robert E. Litan (VP Research and Policy at the Kauffman Foundation, Senior Fellow at the Brookings Institution, Director of the AEI-Brookings Joint Center on Regulatory Studies)

4:00 General Discussion

6:30 Dinner

Location TBA