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A Pari-Mutuel-Like Mechanism for Information Aggregation: A Field Test inside Intel

Gillen, Benjamin J. and Plott, Charles R. and Shum, Matthew (2017) A Pari-Mutuel-Like Mechanism for Information Aggregation: A Field Test inside Intel. Journal of Political Economy, 125 (4). pp. 1075-1099. ISSN 0022-3808. doi:10.1086/692714.

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A new information aggregation mechanism (IAM), developed via laboratory experimental methods, is implemented inside Intel Corporation in a long-running field test. The IAM, incorporating features of pari-mutuel betting, is uniquely designed to collect and quantize as probability distributions dispersed, subjectively held information. IAM participants’ incentives support timely information revelation and the emergence of consensus beliefs over future outcomes. Empirical tests demonstrate the robustness of experimental results and the IAM’s practical usefulness in addressing real-world problems. The IAM’s predictive distributions forecasting sales are very accurate, especially for short horizons and direct sales channels, often proving more accurate than Intel’s internal forecast.

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Shum, Matthew0000-0002-6262-915X
Additional Information:© 2017 by The University of Chicago. Online: June 23, 2017. The financial support of the Lee Center for Advanced Networking, the Gordon and Betty Moore Foundation, and the Laboratory of Experimental Economics and Political Science is gratefully acknowledged. We thank Dan Zhou for providing excellent research assistance and Chew Soo Hong, Erik Snowberg, Allan Timmermann, Michael Waldman, and seminar audiences at Arizona State, Columbia, Einaudi Institute for Economics and Finance, Rome, Massachusetts Institute of Technology, Rice, University of California San Diego, Universidad Carlos III Madrid, University of Zurich, International Industrial Organization Conference 2013, and the Econometric Society North American Summer Meeting 2013 for helpful comments. Data are available in a zip file.
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Caltech Lee Center for Advanced NetworkingUNSPECIFIED
Gordon and Betty Moore FoundationUNSPECIFIED
Caltech Laboratory for Experimental Economics and Political ScienceUNSPECIFIED
Issue or Number:4
Record Number:CaltechAUTHORS:20170810-073549055
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Official Citation:Benjamin J. Gillen, Charles R. Plott, and Matthew Shum, "A Pari-Mutuel-Like Mechanism for Information Aggregation: A Field Test inside Intel," Journal of Political Economy 125, no. 4 (August 2017): 1075-1099.
Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:80054
Deposited By: Tony Diaz
Deposited On:10 Aug 2017 16:47
Last Modified:15 Nov 2021 17:52

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