Thursday, April 10, 2008

Prediction Markets Expanding To Corporations

This general idea of futures forecasting was an idea I learned about in the 70's, see John Brunner's The Shockwave Rider written before PCs really came out.

What I hoped I would learn from the Futures Studies Master's Program at UHCLC, which I entered in the 70's, would be practical tecniques for business and government on predicting the future.

It wasn't, at least when I was there. They seemed more taken with management and government exercises of "visioning" like this workshop here.

Prediction markets and Delphi Polls take advantage of an interesting idea that anonymous crowds with ground operations-level insights may be better at predicting the future than the biased players actually directing the changes. Some Delphi Polls only include the experts in the topic studied which I feel may bias results.

Steve Lohr at the NYT:
At InterContinental Hotels, Zubin Dowlaty, vice president for emerging technologies, decided to create an online market last fall to “harvest and prioritize ideas” from within the hotel’s 1,000-person technology staff. “We wanted to tap the creative class that may not be able to voice their ideas,” Mr. Dowlaty said.

With InterContinental’s prediction market, players were asked to submit ideas anonymously, with a description and the benefit to customers and company. The bettors were given virtual tokens, each receiving 10 green ones to be placed on the best ideas and three red for bad ideas.

There were no limits on the number of times bettors could change their wagers as new ideas came to market, and the market was open for four weeks. The five top ideas (most green tokens), five bottom ideas (most red) and the top five bettors (most accurate, according to market consensus) were listed regularly.

The winners got $500, while second- and third-place finishers received $250 each. The winners, Mr. Dowlaty said, were engineers, analysts and contractors, not managers.

More than 200 people participated, submitting 85 ideas. One person proposed bringing back quarter-operated vibrating beds. “That one got beat down really fast,” Mr. Dowlaty said.
Not the classic futures market but an interesting variation.

Here is more on imaginative/scenario/futuring work which can be useful but seems often shaped by management or politicians to get the results they want and are really a management exercise to get a team committed to a goal.

After my dropping out of the Master's program it seemed ironic that I eventually ended up at Foley's/Macy's in their Houston Research Department with the primary responsibility of forecasting sales. That was much more what I wanted a Futures Studies program to be focused on. Actual working methods of predicting and preparing for the future with tools and techniques. At the time, to me visioning seemed to combine the worst of the new management style "statement of purposes" and "optimism and hard work make it so" and the educational "team consensus building" and group hugs and validations.

It seems odd that the UH Futures Studies site is down. Was the program dropped at Clear Lake, possibly in 2005-2006? Future Studies no longer seems part of Human Sciences but there now appears a Masters of Technology in Future Studies in Commerce at University of Houston main campus....
The newly approved [March/08 Newsletter] future studies program--an interdisciplinary, high-tech discipline that prepares strategic foresight professionals for careers in long-term forecasting and planning--officially began admitting master’s students this semester.
Dr. Peter Bishop, long time Futures Studies UHCL professor, is a leader in the field of strategic foresight. A short video of him speaking. He seems to have been transfered to UH main campus.

If U. of Houston main campus is picking up a version of the program there still remains two universities offering Futures Studies in the United States. I might prefer the University of Hawaii one!

I had a post, I can't find right now but probably linking to here, where a political scientist was making accurate future predictions through group dynamics modeling which is an interesting application of futures studies although commerce and business are also practical applications. Hawaii seems to concentrate on politics while Houston is going to go the business route.

As long as I am writing about predictions I will predict I am going to post my brother's Nov. 5 2005 predictions for this year on my other blog soon. UPDATE - I did and gave him my Cassandra Award.

Interesting interview of political scientist Bruce Bueno de Mesquita, referred to above, on the logic of political survival podcast available for download or listen.

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