Niall O’-Connor:
A previous Economist article, that I have archived, spoke of how Napster was revolutionising the music industry. Another one, called Betfair a radical upstart. A recent article on Hulu discussed how it was “online videos new model.” By anybody’-s standards, these technologies have unleashed the forces of disintermediation, and affected a paradigmatic shift in the industries in which they operate.
By way of contrast, the Economist article on Prediction Markets states that Koch, one of the biggest users of Prediction markets, asserted that they are a compliment to other forecasting techniques and not a substitute to them. The article aslo raises the issue of cultural barriers that are inhibiting the take up of said Prediction Markets – not least, inertia (etc..).
One can take from the article that Prediction markets are not ground break, not radical, not revolutionising- they are not unleashing the forces of disintermediation. Accordingly, on the evidence presented (”much remains to be done to convince sceptical managers of their value”) the battle is an uphill one. Moreover, one can ask, if the battle was not won during the good times, what is the real chance that it will be won during a recession, when company’s are always more resistent to change.
You guys are all speaking from a position of being laden down with prediction market baggage. Your views are not objective, and one can only hope that you are not collectively suffering from disaster myopia. […]
Niall O’-Connor’-s website
The Economist article was mildly positive. Anything more would’ve been a puff piece.
I was pleased to learn that Koch is using PMs, since they weren’t mentioned in a 2007 book about Koch’s “market based management” — http://www.amazon.com/Science-…..470139889/
The Economist could use its own PM to check sloppy statements about radical new revolutionary models blah blah.
“The Economist article was mildly positive.”
OK, let’s say it was “mildly positive”, Mike. Any disruptive technology usually gets *extremely* positive reviews by the media. EPMs is not a technology that will have a lot of applications, and it will not create a billion-dollar consulting industry. That’s the point. And that’s a negative if you compare to the expectations of the prediction market people.
Really? I suspect media often misses disruptive technologies until the disruption is well underway, if then, and is prone to incorrectly calling disruptive ones that are pure vapor.
I’ve never seen anyone claim that EPMs would create a $billion consulting industry.
Of course PMs could have something useful to say about each of the above questions.
“I suspect media often misses disruptive technologies until the disruption is well underway”
Niall O’Connor explained to you clearly the other day that The Economist and others clearly predicted that BetFair (a betting exchange) would revolutionize betting.
“I’ve never seen anyone claim that EPMs would create a $billion consulting industry.”
If the EPM technology were a forecasting technique superior to others, then *ALL* the Fortune 500 would have to adopt it. And thus it would be a billion-dollar industry.
Oh please, cherry picking predictions demonstrates just about nothing, in particular coupled with loose terms such as “revolutionize”.
How big of an industry is enterprise forecasting? How does it break down? Serious questions.
Got you.
The market for “enterprise forecasting”, or “predictive analytics” (a subset of “business intelligence”, “data mining”) is a very promising direction but I doubt that predictive analytics will be a billion dollar industry by itself anytime soon. (http://www.informationweek.com/news/business_intelligence/analytics/showArticle.jhtml?articleID=208402971). Of course, prediction markets cannot be a billion dollar industry if the container industry is smaller than that.
On the other hand, building predictive analytics solutions for enterprises, using data mining, is very hard. Data are spread across hundreds of databases, different formats, incompatibilities… Very few companies have high-quality data warehouses that can be readily mined (e.g., Walmart).
On the other hand, this presents some opportunity for prediction markets. They are easier to understand, potentially easier to deploy, and can be fun to use. Even companies like Walmart (with excellent forecasting tools) may have uses for the markets, to get signals that are currently ignored from their lower-ranked employees.
How Jed Christiansen assesses the news article on EPMs by The Economist
http://www.midasoracle.org/200…..economist/