DP16768 Organizing Data Analytics
|Author(s):||Ricardo Alonso, Odilon Câmara|
|Publication Date:||December 2021|
|Keyword(s):||Audit, Bayesian persuasion, Information Technology, Organizational design, strategic experimentation, tampering|
|JEL(s):||D8, D83, M10|
|Programme Areas:||Organizational Economics|
|Link to this Page:||cepr.org/active/publications/discussion_papers/dp.php?dpno=16768|
We develop a theory of credible skepticism in organizations to explain the main trade-offs 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, while 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 implementation.