Great article by Libby Purves in yesterday’s Times about the ability of Paddy Power punters to predict events in the corporate and political world, such as the collapse of the XL travel company. The Irish-based bookie apparently took so many bets on the XL collapse that it closed its book, even though “jets were still taking off and passengers queueing hopefully at airports.” It is now taking bets on a range of possible events, from Ireland dropping the euro to the identity of the next Met Commissioner.
If you want to know what is going on in the world and the fate that might befall your company, Paddy Power would appear to be the place to go. The buzz term for this form of corporate clairvoyance is ‘prediction markets’, in which companies harness the ‘wisdom of crowds’ (employees, customers) to help forecast consumer demand and market behaviour. For a balanced view of the merits of prediction markets, check out John McQuaid’s article in Wired.