Harvard Business School on prediction markets
November 27th, 2007If you're new here, you may want to get Mercury's Blog by Email or subscribe to my RSS feed. Thanks for visiting!
Professor Andrew McAfee of Harvard Business School has been thinking and writing recently about what he calls “Enterprise 2.0″. It’s his structure to thinking about modern technologies in a business context, based on the ties between individuals within an organisation.
He describes Enterprise 2.0 as four layers, and one of those four is prediction markets. Prediction markets in his system seek to tie together and leverage the knowledge of people that have no other ties in the business. For example, a marketing guy may never know or meet the shipping & receiving manager, but they could both be trading on Quarter 4 sales of a key product.
Other technologies are used for people with different levels of ties. He matches strong ties with wikis, weak ties with social networking tools, and potential ties with blogging.
Professor McAfee goes into much more detail in his blog post on Enterprise 2.0 here. Additionally, he recently gave a speech at the Defrag conference, which was covered by zdnet here. In that speech he was quoted saying:
“There is a missing play here,” McAfee said. “I can’t think of a single reason not to deploy predictive markets.”
Perhaps even more exciting is that he’s teaching future MBA students at Harvard about these technologies. His Harvard Business School course 1550 will be addressing Google’s prediction market and how prediction markets fit into the concepts of management in the information age.
Readers of this blog are likely already convinced of the benefits of prediction markets. People like Andrew McAfee will help convince future business leaders that their employees can be used to provide companies with better business information and make better business decisions. Steps like this are important and good signs for the prediction market industry.