December 16, 2006

Tech lessons learned from the wisdom of crowds

In a 1945 paper, the great Austrian economist F.A. Hayek described how prices set by a free market are really "a mechanism for communicating information" about the probability of future events.

Now, technology firms are using a modern twist on this idea, called prediction markets, as a way to save money, harness the distributed knowledge of their rank-and-file employees, and even answer questions like: When will this software ship? And what will memory prices be like in a few months?

Link: news.com

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