Globe and Mail Article on Corporate Prediction Markets

Another good summary article about corporate prediction markets appeared in the Globe and Mail today. The author, Grant Buckler, interviewed the three main vendors and several users in the space, including our own good friends at Cisco Systems:

"Last month, chip designers at Cisco Systems Inc. in Ottawa turned into stock traders. About 20 employees in the networking vendor's chip-design group bought and sold "stock" based on predictions about how many defects they would find in a new design by the end of the month. Each stock represented a range of possible numbers of defects.

The workers used the play money they earned in their market trades to buy raffle tickets for an Apple iPod; the more money they made, the more tickets they could buy.

For their boss, Allan Silburt, the cost of the iPod was a small price for a more accurate picture of how the chip development was progressing. At the end of the month, he says, the actual number of defects found in the design was in the range that the in-house market had been favouring for the three weeks previous.

Mr. Silburt, senior manager of hardware development at Cisco, says it was his first experiment with prediction markets, a forecasting tool that is gaining popularity in business. He plans to run more - and on a larger scale."

You can find the rest of the article here