> A senior executive saw Prophit give a very low probability that the company would complete the hire of a new senior executive on time (filling the position had been a quarterly objective for the past six quarters). “The betting on this goal was extremely harsh. I am shocked and outraged by the lack of brown-nosing at this company,” the executive said to laughter in a company-wide meeting. But the market was the nudge the execs needed. They subsequently “made some hard decisions” to complete the hire on time.
Indeed. The whole point of the prediction markets espoused is to alter the decisions being made. That means the prediction itself can have an impact on the outcome intentionally or otherwise.
Yes, this example does illustrate this point. As I acknowledge later in the article:
> This turns out to be a general lesson from running a corporate prediction market. Forecasting internal progress, and acting on that information, requires solving complex operational problems and understanding the moral mazes that managers face. Forecasting competitors’ progress has almost none of these problems.
Forecasts on competitors (or, say, regulators) avoids this problem... unless employees are manipulating the outside world too!
Yes it has fewer problems, but not 0. The social network between competitors can be quite tight because the communities involved are so small. So the predictions can be used as social taunts or challenges. Similarly, I can conspire with my friends working for said competitors to game the system to win the prize if the prize is valuable enough.
Basically, betting markets have all the problems and risks of traditional public markets (insider trading) without any of the regulation or ability to enforce the law.
> Indeed. The whole point of the prediction markets espoused is to alter the decisions being made. That means the prediction itself can have an impact on the outcome intentionally or otherwise.
Which is great when the impact of the prediction market is "people making hard decisions" and not so great when they're studiously slowing down the process because they've got a bet on something not happening on time...
> A senior executive saw Prophit give a very low probability that the company would complete the hire of a new senior executive on time (filling the position had been a quarterly objective for the past six quarters). “The betting on this goal was extremely harsh. I am shocked and outraged by the lack of brown-nosing at this company,” the executive said to laughter in a company-wide meeting. But the market was the nudge the execs needed. They subsequently “made some hard decisions” to complete the hire on time.
Indeed. The whole point of the prediction markets espoused is to alter the decisions being made. That means the prediction itself can have an impact on the outcome intentionally or otherwise.