The Herfindahl Index covered in the prior post is an excellent way of measuring competition. Sadly it involves squaring market shares. This seems too much math so in the spirit of simple metrics I’m suggesting a new measure of competitiveness; the BPI or The Bendle Panda Index. It makes Net Promoter look complex and Gigerenzer…
Measuring Competiton 1 The Herfindahl Index
The competitiveness of any industry matters. One way to measure competitiveness is the Herfindahl Index, also known as the Herfindahl-Hirschman Index. Competition Changes Market Outcomes Consumers usually get a bad deal in “concentrated” markets. This is because markets with fewer significant players usually mean less competition. This matters to managers too. If you are considering entering…
A Reason To Be Cheerful
This post from 2013 is a hopeful one about declining overt bias found in polling. While we have had reasons to worry in the intervening years I still stand by the idea that declining overt bias is a good thing. We may not be perfect. I think this is pretty obvious to all, but, at…
Winning And Political Marketing
Winning and political marketing go together like curry and naan. You can have one without the other but it isn’t ideal. As a former political party Finance Director I would have cried if someone had suggested deliberately not using the best techniques we could to win. (More robust staff would probably have washed the person’s…
Nostalgia
Nostalgia is a major problem for human beings. No, things weren’t better when you were a kid. You just didn’t notice the problems. The Better Angels of Our Nature If the past is a foreign country, it is a shockingly violent one. It is easy to forget just how dangerous life used to be, how deeply brutality…
Net Promoter
One of the most interesting discussions about marketing metrics in recent years concerns the Net Promoter System/Score, (NPS). Net Promoter Net Promoter is very simple. It compares % of customers who give high scores on “would you recommend to a friend?” with % of customers who give low scores. The Net Promoter is just the…
Kahneman’s Gripe
Marketing draws heavily on psychology and economics. I feel that both disciplines have much to offer (as well as weaknesses). So it is without any specific agenda that I agree with Daniel Kahneman’s “gripe”. Kahneman’s Gripe Agreeing with Kahnema might not seem brave. Kahneman is a Nobel prize winner. I’d say a good rule of thumb…
The Problem Of Overfitting
Nate Silver’s The Signal and the Noise has much to recommend it. It is about prediction generally, rather than being focused specifically on baseball or politics where he built his reputation. He also notes challenges with statistical models, specifically the problem of overfitting. The Problem Of Overfitting A problem Silver addresses is the overfitting of mathematical…
Surviving Paranoia
I don’t like Paranoia. Excessive fear of other people is a major social problem and encouraging it is just plain wrong. We need to concentrate on getting past it, surviving paranoia. Do Only The Paranoid Survive? Thus I’m not a fan of Andy Grove’s “Only the Paranoid Survive” (Grove 1996). It is not that there…
Are We Good Decision Makers?
An interesting debate in the decision-making field is: Are we good decision-makers? The Debate: Are We Good Decision Makers? This debate occurs most contentiously between supporters of Amos Tversky & Daniel Kahneman and those in Gerd Gigerenzer’s camp. Supporters of Tversky and Kahneman argue that in the 1970’s the core assumption in social science was…