Jed Christiansen at Forbes (just after John Delaney’-s ill-written and pointless comment):
A market effectively aggregates the information from everyone participating. So anything where:
- there is a clear result
- information is dispersed between people and/or locations
- people have an incentive to participate in the market
will likely provide better results than any other forecasting method. Experts just aren’-t as good as they (or anyone else) think they are. It’-s simply better to ask the crowd in these cases.
Missing from Jed Christiansen’-s comment is the emphasis on long series for comparison. Takes time and hundreds of prediction markets to prove the wisdom of crowds.
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UPDATE: Jed Christiansen comments…-
Chris, I agree that for probability assessment, a number of measurements are required to assess success. However, for metrics (ie, sales of widget X, rating of product Y) it doesn’-t require a long series at all. Depending on how poor the current forecasting model is performing, a prediction market could prove successful after just a few measurements.
Chris, I agree that for probability assessment, a number of measurements are required to assess success.
However, for metrics (ie, sales of widget X, rating of product Y) it doesn’t require a long series at all. Depending on how poor the current forecasting model is performing, a prediction market could prove successful after just a few measurements.