Monday, December 07, 2009

Health Care and Education: Game Theory Simulations?

President Obama wants pay for performance (P4P) to solve the ills of health care and education. P4P was the basis of a Defense Department study. The Pentagon incentivized 4,000 social network teams in an intelligence gathering effort. The bonus, incentive pay, was $40,000. WaPo reported:

"It's a huge game-theory simulation," says Norman Whitaker of DARPA's Transformational Convergence Technology Office. The only way to win the hunt was to find the location of every balloon, but a savvy participant would withhold his sighting until he'd amassed the other nine locations, or disseminated false information to throw others off the trail.
These two manifestations are common in extrinsic motivation contests. Substitute doctor or teacher for participant. Do you want them withholding knowledge or deliberately lying to garner the prize?

Dr. W. Edwards Deming suggested giving people a good job to do. Alfie Kohn recommends paying people as much as fairly possible, then making quality work the top focus. Instead American leaders play manipulation games. Theory says they'll sub-optimize the systems they wish to improve.

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