9.7 p.7~

p.9

 

Applied Information Economics: A Universal Approach to Measurement

1. Define the decision

2. Determine what you know now

3. Compute the value of additional information (If none, go to step 5)

4. Measure where information value is high. (Return to steps 2 and 3 until further measurement is not needed)

5. Make a decisuon and act on it. (Return to step 1 and repeat as each action creates new decisions)

 

p.10

Managers may have been exposed to basic concepts behind scientific measurement in, say, a chemistry lab in high school, but that may have just left the impression that measurements are fairly exact and apply only to obvious and directly observable quantities like temperature and mass.

 

p.10

What they seem to take away from these experiences is that to use the methods from statistics one needs a lot of data, that the precise equations don’t deal with messy real world decisions where we don’t have all of the data, or that one needs a PhD in statistics to use any statistics at all.

 

p.13

In fact, humans possess a basic instinct to measure, yet this instinct is suppressed in an environment that emphasizes committees and consensus over making basic observations. 

It  simply won’t occur to many managers that an “intangible” can be measured with simple, cleverly designed observations.