First Ever Economic Patent Issued

March 4, 1997 News Release

On March 4, 1997 the Patent and Trademark Office in Washington, D.C. issued the first ever patent on an economic invention. Dr. Carl Lundgren, who holds a Ph.D. in economics from Princeton University, has developed the Lundgren Forecasting Incentive Method of forecasting and estimating future events. This method can be applied toward prediction of future prices, quantities, and profits. Estimates can be made of environmental impacts, business, financial and mutual fund evaluations, and in many other fields.

Today's decisions affect tomorrow's outcomes. The economic need for accurate forecasts has become an important factor to both private and public concerns. The patented forecasting method developed by Dr. Lundgren has built-in incentives with many desirable features. This includes unbiased forecasts, efficient aggregation of information, and appropriate elicitation of effort levels. Lundgren's method may be used to forecast or estimate any observable or non-observable variable value, including subjective values and probability estimates.

Corporate policy makers recognize the impact future sales or profits can have on their companies. It is a vital part of doing business. Governmental bodies need accurate, unbiased projections to better serve their constituents. With increasing accountability needed from both private and public institutions, it is imperative to have in place a reasonably clear forecast or estimate of events and probabilities. How is this best accomplished? Through objective, unbiased, independent forecasting.

Forecasting is not a new concept. The US economy lives and breathes on forecasts. For example, stocks, bonds and mutual funds are greatly dependent upon the probability of how well they will do in the market. An individual or a group of people analyze and develop a forecast, and ultimately millions of dollars are invested based upon those predictions. The government uses forecasts daily, and accordingly adjusts the manner in which they conduct business.

Forecasters using the Lundgren Forecasting Incentive Method are now presented with greater motivation for accuracy in their analyses and predictions. The more accurate they are, the greater the compensation they will receive for their efforts.

The Lundgren Forecasting Incentive Method pays forecasters in accordance with the "Value Marginal Product" (VMP) of the forecasts they produce on any variable value.

The "Value Marginal Product" is a concept economists have used for a hundred years. In definition, the Value represents the monetary worth or value of the product produced. Marginal is the additional or incremental amount of Product which results from the use of an additional input to the production process. Product refers to the output or production of a good or service. In its simplest form, VMP refers to the monetary worth or value of the marginal product which the forecasters produce.

In today's ever-changing global marketplace, the emphasis must be on staying tuned to the needs of both private and public institutions. With a self-motivated, incentive-based forecasting method in place, those needs can be addressed as accurately as possible. Their survival may depend upon it.

For additional information, please contact ValMarPro Forecasting, Inc.

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