Crowd Predictions in Ford to forecast weekly vehicle sales volumes across business units

The opportunity

Ford leveraged crowd predictions to forecast on two crucial topics: weekly sales volumes and predicting which car features would be popular with customers (as proxied in the interim by traditional market research, such as focus groups or surveys).

The outcome

• Crowd predictions outperformed the expert forecast.
• Crowd prediction forecasts achieved a 25% lower mean-squared error (p = 0.104).
• Employee engagement and learning increased.
• 93% of participants stated that they learned novel information about the company from participating.
• 70% of employees who participated in the project did so because of a desire to help the company answer essential questions.
• Employees that participated in crowd predictions (in this case prediction markets) became better over time.
• Participants learned about their ability over time, and the average skill rose.

Source

• Cowgill B, Zitzewitz E. (2015), Corporate prediction markets: Evidence from Google, Ford, and Firm X. A review of Economic Studies.
• Montgomery et al. (2016). Experience from Hosting a Corporate Prediction Market: Benefits beyond the Forecasts. www.houdekpetr.cz/!data/papers/Cowgill%20et%20al%202015.pdf