Discussion paper

DP16768 Organizing Data Analytics

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.


Alonso, R and O Câmara (2021), ‘DP16768 Organizing Data Analytics‘, CEPR Discussion Paper No. 16768. CEPR Press, Paris & London. https://cepr.org/publications/dp16768