More Companies Using Experimental Economists

from the a-step-forward dept

Wed, Jul 16th 2008 7:29pm — Mike Masnick

While it's true that it's difficult to find economists who agree with each other, that doesn't mean (as some would like you to believe) that economics is useless. The basic principles behind economics are pretty sound. The issues generally come up in how people interpret putting specific situations into economic models. That's because there are so many variables in real world economics, it's nearly impossible to model them all. So, the different opinions coming from different economists tend to be based on what sorts of variables they throw into models, and how they weight them. The truth is, however, that there's plenty of good things to be learned from the various models and experiments done by economists in various fields to try to narrow down those variables and perfect those models.

And, of course, those models can be quite practical. So it's great to see more and more companies (especially in the tech world) hiring experimental economists and putting them to work to start making more economically sound decision making, rather than seat-of-the-pants decisions on ways to adapt new business models, products and pricing. While there will still be plenty of mistakes, there will be a much better overall understanding of what works and why.

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Filed Under: companies, economics, experimental economics
Companies: google, hp, yahoo

6 Comments

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Evostick, 17 Jul 2008 @ 5:24am

Firms to employ Business Analysts
more at 11
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Huh?, 17 Jul 2008 @ 5:26am

Austrian economists I hope!
(For those who don't know I mean the Austrian school of economics, not economists from Austria.)
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Anonymous Coward, 17 Jul 2008 @ 5:45am

I guess using economists instead of lawyers for making business decisions is a step in the right direction. The only problem is that economist jokes aren't as funny as lawyer jokes.
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- Evil Mike, 17 Jul 2008 @ 8:43am
  
  Re:
  Economists are always saying: Well, one the one hand it could do this, and on the other hand it could do thus.
  
  Wasn't it Roosevelt who said "bring me a one handed economist!" ?
  
  Now that's funny!
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Anonymous Coward, 17 Jul 2008 @ 8:46am

Just remember economists are like your local weather team...no matter how wrong they are, they always have a reason for it.
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Anonymous Coward, 17 Jul 2008 @ 2:03pm

If you laid all economists end to end they would still not reach a conclusion.

If you have 5 economists in a room you will get 5 different opinions (6 is one of them went to Harvard).
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