Word: scenarioed
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That is one reason Intel has been bandying markets about for more than two years but has yet to implement them in a real-world scenario. It's not for lack of good results. In a laboratory experiment run with M.I.T.'s Malone, Intel used a market to make a coordination decision: which factories should produce computer chips and when. In the experiment, a centralized, strategic plan was replaced with a market in which salesmen and a plant manager traded futures contracts representing chips. The result was nearly 100% efficiency in allocating manufacturing capacity. That experiment echoed another, real-life...
...That scenario isn't as farfetched as you might think. It's called a prediction market, based on the notion that a marketplace is a better organizer of insight and predictor of the future than individuals are. Once confined to research universities, the idea of markets working within companies has started to seep out into some of the nation's largest corporations. Companies from Microsoft to Eli Lilly and Hewlett-Packard are bringing the market inside, with workers trading futures contracts on such "commodities" as sales, product success and supplier behavior. The concept: a work force contains vast amounts...
...month. If a salesman thought the company would sell between, say, $201 million and $210 million worth, he could buy a security--like a futures contract--for that prediction, signaling to the rest of the market that someone thought that was a probable scenario. If his opinion changed, he could buy again or sell...
When trading stopped, the scenario behind the highest-priced stock was the one the market deemed most likely. The traders got to keep their profits and won an additional dollar for every share of "stock" they owned that turned out to be the right sales range. Result: while HP's official forecast, which was generated by a marketing manager, was off 13%, the stock market was off only 6%. In further trials, the market beat official forecasts 75% of the time...
...know the big knock is that he’s never coached before,” Welch said. “But, worst case scenario is he can’t communicate that well, so we’ll have him throw his equipment on and just go out and skate. Then we’ll take notes...