Noisy evaluations and the choice between parallel and sequential testing

Posted on Tue 16 July 2024 in Research • Tagged with dynamic programming, noisy evaluation, testing mode

Testing many alternatives, with the goal of identifying a single best alternative, can proceed in one of two ways: (i) parallel - where the agent decides on the number of alternatives to examine, and after examining them selects the one that yielded the highest value, or (ii) sequential - where the agent …

Continue reading

Trembling hand and Value of Commitment

Posted on Mon 18 March 2024 in Research • Tagged with dynamic programming, noisy choices

Firms employ stage-gates where information is evaluated before deciding to continue resource commitment toward a project. This approach, wherein investments are not fully ex-ante allocated, has the benefit of being more flexible and deferring resource commitments till better information is available. Still, does such flexibility come at a cost? One …

Continue reading

Do we search more with parallel search or with sequential search?

Posted on Fri 01 March 2024 in Research • Tagged with search, prototyping

In their study examining the tradeoffs between parallel and sequential testing, Loch et al (2001) highlight a rather curious conclusion: sequential testing, because of its ability learn from one to next, will result in fewer tests. Indeed, the ability to learn from one to next can enable faster stopping (and …

Continue reading

How many people should I ask for advice (part 3)?

Posted on Thu 07 December 2023 in Research • Tagged with search, dynamic programming

The earlier model assumed that we wish to maximize the expected value from the decision (“impact”). What if we are interested in maximizing the probability that we are making the right decision. How would the optimal choice change? As before, after asking \(n\) people, we will update the true value …

Continue reading