Next Wednesday I’ll talk at Harvard business school on “Toward Information Accounting“: What gets measured, gets done. Today, organizations account in great detail for revenue and the costs of materials and time, but have only crude informal accounting of info contributed to key organizational decisions. Because info cost and value are poorly measured, info production is neglected.
1. Is trading profit the best measure of information provided to help decision-making. If I am the only one with a crucial piece of information, I maximize my profit by trading in a way that impounds my information into price as slowly and incompletely as possible. If the goal is to reward people who provide information, rather than simply to get the best information aggregator, wouldn't it make more sense to use a different type of incentive in the market, or a different device (such as a delphi process)?
2. Are you assuming that the value of the incentive for prediction-market gains (however calculated) is very small relative to the incentive for better managerial decision-making and outcomes. If not, what unintended consequences should we worry about? For example, would managers conceal information from their colleagues in order to increase the trading value of their information, to the detriment of making decision-making?
Robin, I'm interested in hearing more about this idea. I work for a large management consulting firm and I have often thought about how to quantify value-add in terms of input and strategy provided.
If the discussion is being recorded, please post a link once it has been uploaded.
If I were attending I'd have two questions:
1. Is trading profit the best measure of information provided to help decision-making. If I am the only one with a crucial piece of information, I maximize my profit by trading in a way that impounds my information into price as slowly and incompletely as possible. If the goal is to reward people who provide information, rather than simply to get the best information aggregator, wouldn't it make more sense to use a different type of incentive in the market, or a different device (such as a delphi process)?
2. Are you assuming that the value of the incentive for prediction-market gains (however calculated) is very small relative to the incentive for better managerial decision-making and outcomes. If not, what unintended consequences should we worry about? For example, would managers conceal information from their colleagues in order to increase the trading value of their information, to the detriment of making decision-making?
Cool idea. I'd love to get it implemented. Distorted information flows within orgs bother me to no end.
what a weak comment.
Seems like a great place for you to give a talk. I encourage you to work in some thoughts on managing against existential risk.
Isn't there already similar prediction markets? If you think that this company makes poorer decisions than a competing one, you change jobs.
Robin, I'm interested in hearing more about this idea. I work for a large management consulting firm and I have often thought about how to quantify value-add in terms of input and strategy provided.
If the discussion is being recorded, please post a link once it has been uploaded.
Hi Robin: I live in the Boston area; will your talk be open to the public?