Organizing Data Analytics

Ricardo Alonso and Odilon Câmara

Management Science, 2024, vol. 70, issue 5, 3123-3143

Abstract: We develop a theory of credible skepticism in organizations to explain the main tradeoffs in organizing data generation, analysis, and reporting. In our designer-agent-principal game, the designer selects the information privately observed by the agent who can misreport it at a cost, whereas the principal can audit the report. We study three organizational levers: tampering prevention, tampering detection, and the allocation of the experimental-design task. We show that motivating informative experimentation while discouraging misreporting are often conflicting organizational goals. To incentivize experimentation, the principal foregoes a flawless tampering detection/prevention system and separates the tasks of experimental design and analysis.

Keywords: strategic experimentation; Bayesian persuasion; tampering; organizational design; information technology; audit (search for similar items in EconPapers)
Date: 2024
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http://dx.doi.org/10.1287/mnsc.2023.00207 (application/pdf)

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Working Paper: Organizing data analytics (2024)
Working Paper: Organizing Data Analytics (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:inm:ormnsc:v:70:y:2024:i:5:p:3123-3143

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