If you know how the selection incentive works for a particular situation, you can exploit it to your benefit, or at least prevent yourself from being in an unfavorable position.
First example explains why sales people have such a bad reputation. For the second example, apparently products can’t actually be good or bad by themselves. So it’s the producer who makes the product. Are we assuming a situation where producer is able to select one time users from repeat users?
Can you elaborate your first example more? How does selection incentive come into play in those situations?
The second one is a good example for selection incentive: the incentives are there regardless of what we want. I like the counter intuitive actions in the third example: organisms are deliberately trying to achieve high reward by taking counterintuitive actions.
I particularly like the first & third one. John and I talked about incentive mechanisms in biological world (organisms, biological evolution, etc.) and these are really good examples of it.
Yes, “amplitude” is a more appropriate word. I’ve changed it. Thank you.
I disagree. The key factor to observe bullwhip effect is no coordination among players. For example, retailer does not share consumer demand information with the wholesaler, and the wholesaler does not share demand information with the distributor, etc.
Yes. The beer game has been frequently used in undergraduate and MBA programs when professors introduce the bullwhip effect.
It can be any real-valued measurement of objects, as long as we can reasonably assume the three assumptions are satisfied.
Thank you for your well-thought comment. One of the desiderata used to derive the original product rule is to use real numbers to represent the degrees of plausibility. So, it will be very interesting to see if the result still holds if we relax it to be a complex numbers.
I’ve taken the test not long ago and I agree it is quite informative. One concern I always have with these kinds of tests is that we tend to select options (at least in some cases) that highlight who we want to be rather than who we really are. I would like to know how this kind of bias is reduced.