There was coverage on this week’s Material World programme on Radio 4 about some recently published research from Northwestern University into behaviours seen on reverse auction internet sites.
It showed that (from analysis of a mass of publically available data) that just about everyone who takes part in such auctions (where a relatively high-value item is won by the person who submits the lowest unique bid) uses more or less the same optimal technique for placing those bids, and as such these auctions amount to little more than a lottery. Over time more and more people will realise this, and the popularity of such auctions will probably wane.
On Material World, the discussion then went on to talk about the way in which people in the financial markets these days have pretty much the same data and tools available, and as a result if a particular trader seems to have a particularly successful streak, it’s almost certainly down to luck rather than some special ability.
This latter point got me thinking – if the marginal differences that new technology might give are becoming increasingly small for a high effort (some Big Data type initiatives spring to mind here), then might a sensible economic approach at some point be to not to invest in the short term to gain marginal advantage, but instead wait a while to see if you can make a bigger leap than others as a result of not having kept up with the curve?
In my last role, the technology that I inherited had become significantly behind the times. As a result of a lack of investment over a few years, I therefore had the opportunity to make a much bigger leap (in this case into the world of Software as a Service) than I would have been able to if there was more investment to “throw away”. Early adoption may give advantage at the time, but can become a costly legacy in the future…
mmitII 