Jan 26, 2011
In the coming year, CFOs can be expected to hear a lot about the value of analytics – to convert corporate data and information from hindsight to insight and then, ideally, valuable and actionable foresight. Generally, the two most common approaches to generating foresights are the use of statistics and mathematical models, and the use of machine learning tools such as neural nets and genetic algorithms software to mine existing data and generate predictions.
While we may explore these approaches and their business applications to finance in future articles, this paper features an emerging third approach to generating predictions: the use of “social analytics” through prediction markets. Instead of fancy statistics and software, prediction markets tap into the “wisdom of crowds” and the capacity of markets to aggregate beliefs to generate predictions. This article explores how CFOs can use prediction markets as part of their portfolio of decision support tools.
Read the full article . . . . CFO insights: Social analytics – Tapping prediction markets for foresight
Visit the Deloitte Consulting home page