Information aggregation mechanisms: concept, design and implementation for a sales forecasting problem

Abstract

Information Aggregation Mechanisms are economics mechanisms designed explicitly for the purpose of collecting and aggregating information. The modern theory of rational expectations, together with the techniques and results of experimental economics, suggest that a set of properly designed markets can be a good information aggregation mechanism. The paper reports on the deployment of such an Information Aggregation Mechanism inside Hewlett-Packard Corporation for the purpose of making sales forecasts. Results show that IAMs performed better than traditional methods employed inside Hewlett-Packard. The structure of the mechanism, the methodology and the results are reported.