Saturday, March 04, 2006
Interesting Idea
Some dude, Tom Locke, decided to see what he could extract out of companies just by asking. He decided to dedicate a whole roll of stamps to sending letters to 100 companies asking for free stuff in order to see what kind of return he could get on this investment of $39.
The idea is, I think, much cooler then he realizes. It will be interesting to see who responds, how quickly they respond, and what they actually say and do. Specifically, I am interested in whether or not firms in more competitive markets respond more favorably (because they value each customer more)? (You could probably do something similar using Letters from a Nut.)
Unfortunately, there are a couple of problems with the project. First, the title, "the 39 dollar experiment," is misleading. He even recognizes that he spent more that $39. Including other materials, he estimates $52 were spent. However, even this fails to account for the 10 hours he spent finding addresses and writing letters. Why are economists the only people to care about opportunity costs?
Second, and more importantly, he posted this online too soon. His results may now be biased because firms are likely to learn that their responses will be publicly displayed. As such, Tom may end up getting a large return on his investment. While that is good for Tom, it is not good for his experiment.
The idea is, I think, much cooler then he realizes. It will be interesting to see who responds, how quickly they respond, and what they actually say and do. Specifically, I am interested in whether or not firms in more competitive markets respond more favorably (because they value each customer more)? (You could probably do something similar using Letters from a Nut.)
Unfortunately, there are a couple of problems with the project. First, the title, "the 39 dollar experiment," is misleading. He even recognizes that he spent more that $39. Including other materials, he estimates $52 were spent. However, even this fails to account for the 10 hours he spent finding addresses and writing letters. Why are economists the only people to care about opportunity costs?
Second, and more importantly, he posted this online too soon. His results may now be biased because firms are likely to learn that their responses will be publicly displayed. As such, Tom may end up getting a large return on his investment. While that is good for Tom, it is not good for his experiment.
// posted by BW @ 8:36 AM 
Subscribe to Posts [Atom]