Tuesday, September 24, 2013

Be careful of silos

Interesting talk about inter-divisional conflict: The problem is easily illustrated with a soccer team:
Assume that compensation for defensive players is inversely proportional to goals allowed, and compensation for offensive players is directly proportional to goals scored. Rational defensive players would rather lose 0 to 1 than win 5 to 4—because their payoff is higher when they allow only 1 goal than 4. Similarly, rational offensive players would rather lose 4 to 5 than win 1 to 0—because their payoff is higher when they score four goals than one.

1 comment:

  1. The problem with this approach is that it provides little incentive for offensive players to assist in/play defense or vice versa for defensive players. As any good sports fan knows, it is also the case that is the offense is unconcerned with defensive roles, for example with the score of the other team, they may be less concerned with factors such as errors or turnovers that will hurt the defense. Similarly, if the defense is only concerned with keeping the other team from scoring, they may be less concerned about helping the offense for example with recovering the ball in good scoring position. These are just a couple of ways in which an incentive system that gets each unit to focus solely on its own production may undermine the ultimate goal of winning. A better simple system would be to reward the entire team for each win. If holding the score of the opponents down and running up large scores for your own team are goals the team owner wants to incentivizes, one approach that does this equally for all units would be to provide additional rewards over and beyond those provided for simply winning that are based on the score differential achieved.