A Parimutuel-Like Mechanism for Information Aggregation: A Field Test Inside Intel
43 Pages Posted: 3 Oct 2014
Date Written: September 27, 2014
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
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