A Parimutuel-Like Mechanism for Information Aggregation: A Field Test Inside Intel

43 Pages Posted: 3 Oct 2014

See all articles by Ben Gillen

Ben Gillen

Claremont Colleges, Claremont McKenna College, Robert Day School of Economics and Finance, Students; California Institute of Technology - Division of the Humanities and Social Sciences

Charles R. Plott

California Institute of Technology - Division of the Humanities and Social Sciences

Matthew Shum

California Institute of Technology

Date Written: September 27, 2014

Abstract

Field tests of a new Information Aggregation Mechanism (IAM) developed via laboratory experimental methods were implemented inside Intel Corporation for sales forecasting. The IAM, which incorporates selected features of parimutuel betting, is uniquely designed to collect and quantize as probability distributions any dispersed, subjectively held information that might exist. The tests demonstrate the robustness of experimental results and the practical usefulness of the IAM. The IAM yields predicted distributions of future sales that are very accurate at short horizons; indeed, more accurate than Intel's official in-house forecast 59% of the time. A symmetric game model suggests why the IAM works.

Keywords: information aggegation, mechanism, subjective probability, parimutuel

Suggested Citation

Gillen, Ben and Plott, Charles R. and Shum, Matthew, A Parimutuel-Like Mechanism for Information Aggregation: A Field Test Inside Intel (September 27, 2014). Available at SSRN: https://ssrn.com/abstract=2504171 or http://dx.doi.org/10.2139/ssrn.2504171

Ben Gillen

Claremont Colleges, Claremont McKenna College, Robert Day School of Economics and Finance, Students ( email )

500 E. Ninth St.
Claremont, CA 91711-6420
United States

California Institute of Technology - Division of the Humanities and Social Sciences ( email )

1200 East California Blvd.
Pasadena, CA 91125
United States

Charles R. Plott (Contact Author)

California Institute of Technology - Division of the Humanities and Social Sciences ( email )

1200 East California Blvd.
337 Baxter Hall
Pasadena, CA 91125
United States
626-395-4209 (Phone)

Matthew Shum

California Institute of Technology ( email )

Pasadena, CA 91125
United States

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
28
Abstract Views
407
PlumX Metrics