
Tech lessons learned from the wisdom of crowds - python_kiss
http://news.com.com/2100-1014_3-6143896.html?part=rss&tag=2547-1_3-0-5&subj=news
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python_kiss
A very interesting bit from the article:

"Microsoft: When Todd Proebsting, director of Microsoft's Center for Software
Excellence, tested a prediction market internally, managers quickly gave it
their blessing.

The goal: to have 25 members of a development team predict when a Microsoft
product would ship (this was an internal product, not one sold externally).
The prediction market was set up in August 2004, and the product that "had
been in the works for a long time" was scheduled to ship in November 2004.

Each "trader" received $50 in their account to start with, and was told that
the more accurate their prediction, the more money they would make. The market
opened with an initial price of on-time delivery set to 16 2/3 cents.

"The price of 'before November' dropped to zero right away," Proebsting said.
"The price of 'on time' in about two to three minutes dropped to 2.3 cents on
the dollar." Translated, that's more than 30-to-1 odds against on-time
delivery.

Then the woman who was responsible for scheduling started trying to convince
her colleagues who were buying and selling future delivery dates. "She was
able to talk (on-time delivery) up to around 3 cents," Proebsting said.
"People really enjoyed moving the price...They loved this."

"The next day the director comes into my office and said, 'What have you
done?'" Proebsting said. But further investigation showed that the product
actually was behind schedule, even though nobody was telling management, and
it eventually shipped in February."

It is amazing what the crowds are capable of! Often times, groups can be
smarter than the smartest individuals in them.

