New predictive rational method
CROW
SHANG
D
0.27% expected error
IN SHORT
• Who needs: everyone, especially politicians, financiers,
entrepreneurs, CEO, executives and sales managers.
• Why it is useful: for any kind of forecast, from Stock
Exchange to Sales
• In writing the book Prevedere per Decidere, Marco Galleri
considered the general and particular aspects of rational
predictive methods and he conceived the Crowdshang idea,
where the binary surveys, previously submitted to
thousands of people, are perfected by a group of trained
experts.
• The idea is quite simple: the worth of the Shang method is
greatly enhanced by the wisdom of a huge crowd; the
common sense of the analysts and the coordinator plays any
differences that could improve this method.
• On the other hand: in a huge crowd, you can find large
numbers of specialists and thus obtain correct surveys.
MARCO GALLERI Teoria e Pratica d’Azienda. www.marcogalleri.it
2
CROWDSHANG METHOD
A large crowd responds to repeated binary questions.
Average
historical error
2.5%
Average
expected error
0.9%
Average
Estimate
CROWD SHANG
Free estimate of the crowd
Average
expected error
0.3%
Greater or less
than a central
value?
Estimate
completed by
the group
An experienced group in face-to-face interviews verifies the estimate and perfections it.
MARCO GALLERI Teoria e Pratica d’Azienda. www.marcogalleri.it
Free estimate of the crowd: Central value 0
NUMERICAL EXAMPLE
Average Value
1000
Ask for the minimum (m) and the maximum (M)
By averaging you obtain: the minimum 1 (m1),
the maximum 1 (M1), and the central value (C1)
m1 = 980 ; M1 = 1060; C1 = 1020
Ask if the value is greater or less than C1 (or
before or after)
You can determine the range of
change also with: max of the max,
minimum of the minimum, minimum
of the max, average of the max,
average of the minimum, median of
the max, median of the minimum
If the most frequent (modal) response is…
Greater than C1:
C1 it becomes m2
and we average
C1 and M1 to
determine C2
Lower than C1: C1
becomes M2 and
we average c1 and
m1 to determine
C2
Ask if greater or less than C2 (as above C3 is
obtained)
•
Once C4 is obtained, it is proposed, as an
average, to the expert group (C4 … C7)
•
•
C7 concludes the estimation process
Major:
Minor:
m2 = 1020
C2 = 1040
M2 = 1020
C2 = 1000
Summary
The free estimate of the crowd is based on
the Wisdom of Crowds and produces an
historical average error of 2.5%.
After three of his consultations with the
Shang method the expected error is 0.9%
The group adopts the same procedure with
the Pfizer method : the expected error ( C7 )
is 0.3%
MARCO GALLERI
strategia
organizzazione
comunicazione
marketing
For more information:
www.crowdshang.com
www.marcogalleri.it
5
Il Poggio 58036 Sassofortino (GR) tel. & fax 0564.567.118 mobile 333.2456.338 www.marcogalleri.it [email protected]