Therefore, managers need to adopt the mindset of a plumber (a term coined for the new-age economist by Esther Duflo, co-recipient of 2019 Nobel Memorial Prize in Economic Sciences). As Duflo suggests, plumbers try to predict what may work in the real world, mindful that tinkering and adjusting will be necessary as our models give us little theoretical guidance on what (and how) details will matter.
Let us look at an example where the manager donned the plumber’s hat. Every digital marketing class teaches the effectiveness of search advertising (placing online ads in search engine results). Managers in the eBay advertising team were spending millions of dollars on search ads. Then, one day, eBay allowed the search advertising team to tinker and experiment with the process. They found that most search ads had little effect on sales. This saved eBay millions of dollars.
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November 08, 2020