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The Production and Application of Knowledge

Wired had an interesting article about how Watson, the famous IBM computer that defeated humans at Jeopardy, is better than doctors at diagnosing cancer in patients. I quote the most interesting paragraph for my purposes here:

According to Sloan-Kettering, only around 20 percent of the knowledge that human doctors use when diagnosing patients and deciding on treatments relies on trial-based evidence. It would take at least 160 hours of reading a week just to keep up with new medical knowledge as it's published, let alone consider its relevance or apply it practically. Watson's ability to absorb this information faster than any human should, in theory, fix a flaw in the current healthcare model. Wellpoint's Samuel Nessbaum has claimed that, in tests, Watson's successful diagnosis rate for lung cancer is 90 percent, compared to 50 percent for human doctors.

First some initial thoughts: the idea of needing 160 hours per week to keep up with what's new in your field is an incredible fact. There is no way to hope to be on top of everything. It is no wonder that doctors use relatively little evidence based medicine in their practice. There is simply too much evidence, which implies a high degree of information or knowledge congestion.

Second, the differential in success rates in predicting cancer between doctors and Watson is absolutely astounding! Doctors are only right about half the time (no better than a coin flip). Enter Watson, who gets a diagnosis right 9 times out of 10. This is as clear an opportunity as I have ever seen at improving the efficiency any process.

So, what are some implications of this?

We, as individuals, cannot keep up with our own rate of knowledge production in any field. So if we want to get really good at something, it has to be increasingly narrow in scope (Ben Jones at Northwestern calls this the 'burden of knowledge').

Computers are proving to be increasingly more adept at the application of knowledge (hence all the excitement over big data).

Taken together, it seems that people ought to focus on their comparative advantage of producing new knowledge and we should increasingly rely on computers to process and apply that information. Of course, both activities inform one another, so this is likely to be a cyclical relationship.

#knowledge #computing #ibm #medicine

A look at how firms respond to regulations requiring them to disclose toxic chemical emissions.

Here is a link to an article I wrote for Footnote. It summarizes a research paper I coauthored with Mike Toffel and Glen Dowell that is forthcoming in the academic journal, Strategic Management Journal.

Let me know if you have any thoughts or questions!

#dislcosure #research #epa #tri

Would Firefly Have Been Cancelled Had Twitter Existed in 2002?

With Hawaii Five-0's recent vote-for-the-ending show, we can see the potential for television shows to be a two-way dialogue between a show's producers/writers and its viewers. The Wall Street Journal reinforced this idea by reporting on how certain elements of television shows were influenced by Twitter fan response.

I started thinking about one of my favorite shows, Firefly. For those of you who are not familiar, Firefly was a Joss Whedon product set in outer space, but with a western-style feel. A lot of people loved the show.

The only problem, though, was that the network did not know it at the time. Citing a lack of ratings, the network canceled the show before the entire first season even aired. But in the decade-plus aftermath of the cancellation, fan websites, documentaries, convention panels, communities, fan fiction, and more fan-based enthusiasm has thrived.

So I wonder: would the show have been cancelled had Twitter existed four years earlier? Or at least, would the show have been given a longer chance to prove itself if Twitter was around and fans had a chance to show their enthusiasm in real time?

Perhaps the ratings might never have materialized. But I would bet that Twitter would likely have demonstrated just how intensely the viewership loved the new show.

Photo credit: Wikipedia

CBS Highlights User Influence Over Production Content

Tonight's episode of Hawaii Five-0 features what is being touted as the first-ever live vote for the ending of a television show. There are three suspects in a murder case, and fans can vote which of the three committed the murder. The vote will take place during the show and the suspect with the highest tally will be revealed to be the murderer. Of course, three endings had to be filmed for this to be pulled off.

This example makes explicit the two-way relationship that has emerged between content consumers and content creators. But what has been the more subtle impact that consumers have had over content creators, especially nowadays when aggregated, real-time, consumer sentiment can be gathered?

Surely, in the past TV ratings and other metrics collected over the season influenced executives' decisions to keep or drop television shows. But now, maybe the content producers themselves change the course of a show during the season. Viewers don't like a character... maybe we should kill him/her off? Viewers are excited to see two characters flirting... maybe we will prolong their courtship? We can easily imagine how content consumers can shape the course of creative content by exerting their collective influence over content producers, who want a product that is in high demand to extend the show one more season.

This type of influence is a "wisdom of the crowds" kind of thing. But, here, there is no convergence to some optimal solution. This is creative content with no "right" answers. And there are certainly critics to the idea that artistic control of creative content be wrested to consumers. While social media is a boon to the industry's desire to promote real-time viewing, a tension exists between promoting demand (and making people watch commercials) and creativity (organizations that cater too much to customers may miss the boat on new innovations and ideas)

Source and Image Credit: CBS

When Public Information is "Too" Public

Recently, The Journal News, an upstate New York newspaper, used a series of Freedom of Information Act requests to local governments to obtain the contact information of gun permit owners in a few New York counties. The contact information of every gun owner in these regions is a matter of public record. The newspaper then published the database on online. The action of posting that public information about private citizens proved to be quite controversial. The resulting anger was enough to compel the newspaper to hire armed guards at their offices.

What interests me in this series of events is the fact that the information was a matter of public record all along. That never changed. What did change was the fact that a third party aggregated, maybe digitized it (depending on the format it was received in), and shared it. It was these actions that incited the angry response. (It is possible that the newspaper merely shined a light on the fact that these people's information was public and they would have been upset had they known it was public all along, but I am going to discount this explanation. The main reason is because the anger was directed at the newspaper, not the government offices.)

Criticisms were abound. Now ill-intentioned people had a catalog of houses that did not own guns. Why is any private individual's information being posted online simply because they exercised their legal right? What is the value of posting the information? In other words, could the editors have accomplished their goals without the display of the data at the individual level? (There was also the question of whether this was 'newsworthy' since the disclosing party was a newspaper. But that begs the question of what is considered news these days and that is a post for another day.)

Even with those criticisms, was what the newspaper did wrong? After all, they too, were exercising a legal right to acquire the information. (In fact, I think the only party that did something technically wrong was the government office that refused the FOIA request.)

Given that is the case, I think the question boils down to this: what was/is the purpose of making the contact information of gun owners public record? Typically, information is required to be disclosed by law when that disclosure allows for interested parties to be more informed. Then those interested parties can act on the information, by consuming differently, exerting pressure on various parties, etc. But how does this apply to the disclosure of gun owner addresses? It is not clear to me. I suspect the problem is that the information collecting source (i.e. the government) was not the same as the information disclosure source (i.e. the newspaper), so this dichotomy exists.

I think the gun ownership records raises a broader issue. How do we handle the incredible wealth of information assembled by government agencies that is publicly available about us? At this point, I believe we have to consider absolutely every piece of publicly available information as being potentially aggregated, digitized, and shared. Are we comfortable with someone putting the "paper trail puzzle" together on a whole lot of people, available all in one place?

There can be value to having your (and a lot of other people's) personal information collected in one place--see Google Now (which is a pretty amazing service, I have to admit). But there is obvious potential for abuse and extraction of information that was not even documented to begin with. These types of issues get to the heart of privacy concerns that exist now.

These questions also relate to public records. It used to be that "public record" meant that you probably had to go to a physical place and records were likely in separate folders or papers. Now that they are (or can easily be) digitized and aggregated, we ought to ask whether the government should be one of the institutions that collects data on individuals.

#information disclosure #foia #public record

A post written by my co-authors about an article we have published (forthcoming). In the paper we study how laws that mandate information disclosure affect the behavior of those disclosing firms.

#information disclosure #firm performance #EPA #TRI

What if Samsung and Apple "discovered" similar designs at the same time?

The Apple v. Samsung case has begun (The Verge and others are providing detailed coverage). At the core of Samsung's case is the argument that Apple themselves borrowed elements borrowed from previous phones for its 2007 iPhone. Also, Samsung claims the Apple patents are invalid by stating they were working on similar designs prior to the iPhone release, as shown in the case documents (pictured above, borrowed from Boy Genius Report).

What is most interesting about the case is that both Apple and Samsung (and potentially many other firms) ostensibly arrived at similar designs at about same time. Whether this actually happened or how the case will be determined in court is unclear, but the concurrent development of the designs leads to some interesting questions.

This idea that different individuals or organizations operating independently would arrive at the same innovation at roughly the same time is described as "multiple" or "simultaneous discovery." Multiple discovery is interesting. The idea has been around for a while and we think it happens all the time. One approach to thinking about how multiple discovery are arrived at involves an implicit race to some discovery that is a "natural" result of knowing the current state of science and/or technology. Given the same set of knowledge and the same "know-how", multiple individuals or firms can arrive at a similar discovery.

For firms engaging in such a competition, discovering the innovation provides commercial, strategic and knowledge benefits. Would a firm would choose not to undertake that investment if they knew (a) their competitors were doing so and (b) nobody could receive any intellectual property rights over the discovery, so capturing the value from the discovery involved certain complementary assets (such as a strong marketing team, complementary goods or services, etc.)?

The law's treatment in these situations is to give credit to the first party to file for the patent (which recently changed from granting the patent to the first party that invented). However, what is the role of intellectual property protections in a discovery that (on the surface) seems to be a natural progression in the science or technology in question? If competitive forces are the mechanism that result in the innovation, do we need to provide duplicative incentives in the form of patents?

If simultaneous discovery occurred where information is more transparent and available to more independent actors, I suspect we would likely see a dramatic increase in the number of simultaneous discoveries in science and technology. Then, do we continue to grant patents to the company or lawyer who gets to the FedEx office fastest?

Perhaps there is a theoretical benefit to somehow registering the innovation races. If some social planner was aware of multiple actors pursuing the same innovation, then the innovation is a result of the current state of knowledge and technology, and perhaps that discovery would ((more obvious.)))

#samsung #apple #smarthphone #patents #multiple discovery #intellectual property

The Value of Participating in the Kickstarter Community

I recently backed my first and second Kickstarter projects, which I am very excited about. I have been following a bunch of projects for a while and I finally decided to take part in the community.

The HAND Stylus project got me thinking about the tiering decisions made by the project creators and the pledge decisions made by the backers. There is an interesting interplay between pledge "price points," incentives, and ultimately the choices of which tier to pledge.

The first tier is $25, for which a backer would receive one stylus. For the second tier, $30 option, a backer would receive one stylus plus a six back of replacement tips (the rubber nubs that fit at the end of the stylus).

The description of both tiers indicate the price paid represents a $5 discount off the retail price. So that would imply that the retail price of the replacement tips is $5, which is exactly the extra amount of money one has to currently pledge to receive them.

What is so interesting to me is that a backer is spending an extra $5 (20% more than the first tier) toward the same uncertain product (a backer is not sure how much she will like it, nor can she be certain she will receive one at all). What is even more interesting is that the value of the replacement tips is unclear: the tip on this stylus retracts to protect the tip and there are no concrete examples of nubs on other styluses wearing down. The creator merely acknowledges that worn rubber tips is a distinct possibility, so he is kindly offering the replacements. If, down the road, the tip wears down, then someone could just buy the replacements at retail for $5.

So pledging an additional $5 for nothing obvious in return means that nobody would pledge in the second tier. Right? Wrong! As of this writing, there are 529 backers who pledged $25 and 2,935 backers who pledged $30!

So why are people pledging at the $30?

At first, I thought the description of the $30 pledge tier was vague and it was not clear whether part of the discount related to the replacement tips. But after a second read-through, I was convinced that the $5 off retail is, in fact, off the retail price of the stylus.

Then I thought this must be some violation of "rational" economic behavior on the part of the backers. This may be the case, but "rational" economic models should explain (not prescribe!) how individuals behave, and clearly they are not behaving that way!

Finally, I thought that this might be a way of "valuing" the community aspect of Kickstarter. People just wanted to contribute that little bit extra to the project, or they want to see it reach the funding goal (which it has seven times over), or they care about the idea! And that caring is worth money to them--approximately $5.

Update (7/18/12): It looks like the sales site is up for the Hand Stylus and there was, in fact, a $5 discount on both the stylus and the six-pack of replacement tips. So what cost $30 on Kickstarter will cost a consumer $40 in a normal purchase.

#kickstarter #stylus #handstylus

Strategic Consumption in the iOS App Store

Quick thought on my strategic consumption habits in the App store. I know Apple never puts their apps on sale. So my decision to buy is simply whether to buy or not. The knowledge there is a constant price makes me throw out trying to "time the purchase." Most other apps, however, regularly go on sale. And knowing that, I wait to buy when it goes on sale. So my strategic consumption hurts the software developer, because they have to wait to get my money and they get less than the "regular" price. Even worse, just thinking that it might go on sale stalls my purchase, perhaps indefinitely.

One of the only reasons I can think of not buying strategically when I know there is volatility in the price is that I need to get the functionality of (I derive utility from) the app now. But I think this does not hold too for me, really, because I have so much other content to consume and stuff to do on my iPad, that I do not mind waiting for that next bit of functionality.

#itunes #apple #app store #game theory

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