Mapping Strategy

Scenarios, Competitive Strategy... and Ravens

Fascinating article in Der Spiegel on the high intelligence and intricate competitive strategies of ravens.

Such intricate strategic planning requires ravens to consider things from various points of view. It's almost a question of seeing through the eyes of others.

Some human strategists don't do as well. Check it out.

Predictability and Social Influence

Thought-provoking piece in last Sunday's NYTimes with implications much larger than its title ("Is Justin Timberlake a Product of Cumulative Advantage?") might suggest [emphasis added]:

...people almost never make decisions independently — in part because... what we often want is not so much to experience the “best” of everything as it is to experience the same things as other people and thereby also experience the benefits of sharing.

...our mutual dependence has unexpected consequences, one of which is that if people do not make decisions independently — if even in part they like things because other people like them — then predicting hits is not only difficult but actually impossible, no matter how much you know about individual tastes.

Bottom line: social influence makes predicting winners extremely difficult, if not impossible, while exaggerating the magnitude of more popular choices (e.g., brands, artists, products, candidates). It also muddies the notion of 'quality' being an objective, independently derivable 'thing'... which is something that Robert Pirsig pretty much concluded years ago, coming at it from a completely different (abstract, philosophical) direction.

As I've said all along about prediction markets--and prediction in general--one must judge carefully whether what one is trying to predict is intrinsically predictable at all. Short take: elections good, next quarter's profits good; specifics of the next terrorist strike: probably not. The popularity of some kinds of products fall closer to the Justin Timberlake (high social influence) end of the scale while that of others (think truck parts) probbly does not. The second thing to note here is that, in an environment where pure prediction is impossible, it pays to have a flexible, scenario orientation that can anticipate a wide range of possibilities and recognize them quickly if/as they unfold.

(HT: JH)