From: Peter C. McCluskey (pcm@rahul.net)
Date: Tue Aug 08 2000 - 09:12:34 MDT
N.Bostrom@lse.ac.uk ("Bostrom,N (pg)") writes:
>One point that I would be interested in seeing discussed in the paper is
>whether this system of decision-making is often used in corporations, and if
>it isn't, what is the reason? Is it the case that nobody has thought of
For large companies, it is hard to make managers interests coincide
with those of stockholders, and managers would clearly loose a good
deal of authority if IF markets produced good management decisions.
Stockholders could in theory order management to use IF markets, but
it would take a good deal of work to specify which decisions should
be made this way, free rider problems deter most stockholders from
making any effort, and select effects insure that most stockholders
think their companies are managed better than average already (singling
out one company to be the first to be dragged into a new management
process would tend to imply that there is something subpar about the
current management).
There are a lot of small companies where managers own a large enough
fraction of the company that their interests as stockholders can override
their interests as managers, but they are usually small enough that the
knowledge that its employees possess isn't dispersed widely enough for
the means of using that information can be much improved by IF markets.
There are significant legal obstacles to allowing non-employees to
bet real money. Making bonuses contingent on an IF market results poses
few legal problems, but once you allow people to invest/gamble money
that is already their property, expensive regulations apply. There are
enough entrenched special interests (casinos, financial markets) that
could loose business to IF markets that legal change won't happen easily.
A few companies such as Microsoft have neither of theses obstacles, but
their existing management practices have produced good enough results that
they have little incentive to experiment with alternatives.
hal@finney.org (hal@finney.org) writes:
>First, the number of possible strategies is nearly infinite. This is a
>common problem in AI/robotics work as well. For a robot to accomplish
I.e. IF markets might "merely" improve the ability to compare alternatives
that companies are currently comparing, rather than enabling them to
compare alternatives that are currently being overlooked.
>The obvious practical problem is that no IF market exists!
>If corporations were going to piggyback on an existing IF market to
>evaluate future strategies, they couldn't do so until there was such
>a market.
http://www.industryfutures.com is reportedly offering the appropriate
services for a company to run internal IF markets.
-- ------------------------------------------------------------------------------ Peter McCluskey | The US Idea Futures Exchange: speculate on http://www.rahul.net/pcm | political,financial issues at http://www.usifex.com
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