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Overcoming Bias Commenter's avatar

I think you're missing a risk variable, which is why it appears anomalous to you that Results based evaluation is seldom used. Most buyers would love to pay only for Results, but most Suppliers refuse.

Because not only is it that "action is risky, not always reliably producing desired results" but also articulation - risk arises from the inexact articulation.

That's two risk variables to multiply your expected return by.

Yes, "The more aspects of what we want that we can articulate and verifiably measure," the more we can use Results. Sales and commission is a classic example.

But with anything subjective - a painting, happiness, child rearing - as a Supplier, you not only run the risk that your action may not produce the desired results, you also run the risk that the Buyer will claim the result produced does not match what was desired.

How do you know you settled a lawsuit for the best deal? You don't, so you go with Prestige. Is it any wonder that class-action lawyers that work on contingency have such low Prestige?

How do you know someone will care for your child the best way? You don't, so you go with Loyalty. Is it any wonder that babysitters have such a bad reputation with respect to infidelity?

How do you know someone will make you the most happy? You don't, so you go with Record. Is it any wonder that people so easily bore of paid substitutes.

And procedures? Procedures are not about producing results. They are about getting people to accept the outcome.

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RobinHanson's avatar

That is an issue with ALL of the ways to evaluate.

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