Can Markets Govern Companies?

Markets can already aggregate information and constrain treasury actions, but whether they consistently produce better corporate decisions than boards remains unproven. Cowgill and Zitzewitz found that markets at Google, Ford and Firm X produced useful forecasts, with a 25% reduction in mean squared error for Ford sales forecasts, though they also documented optimism and thin trading. MetaDAO has used conditional pass and fail markets to govern 96 proposals across 14 organizations since November 2023, but only the selected path occurs, so decision quality is not measured. Umia, which launched UMIA on Base, applies this model to venture formation, and its auction reached its $6.2M USDC target on August 29.