http://www.manifestdensity.net/2009/06/14/the-uncannily-inefficient-valley/ Just another WordPress weblog Fri, 03 Feb 2012 18:04:33 +0000 hourly 1 http://wordpress.org/?v=3.3 http://www.manifestdensity.net/2009/06/14/the-uncannily-inefficient-valley/comment-page-1/#comment-1744 Tom Tue, 16 Jun 2009 02:20:32 +0000 http://127.0.0.1:8888/?p=809#comment-1744 I agree that you can make a case for the incentive structure of the Valley working for finance -- but that's what others have done in posts like the one I cited. My interest was in pointing out the way in which the software industry operates on a practical basis, to illustrate that its compensation structure doesn't necessarily lead to an efficient allocation of resources. Put another way: the elimination of an identified moral hazard may not be sufficient to produce a system that genuinely works well. I agree that you can make a case for the incentive structure of the Valley working for finance — but that’s what others have done in posts like the one I cited. My interest was in pointing out the way in which the software industry operates on a practical basis, to illustrate that its compensation structure doesn’t necessarily lead to an efficient allocation of resources.
Put another way: the elimination of an identified moral hazard may not be sufficient to produce a system that genuinely works well.

]]> http://www.manifestdensity.net/2009/06/14/the-uncannily-inefficient-valley/comment-page-1/#comment-1743 Cthorm Tue, 16 Jun 2009 00:47:46 +0000 http://127.0.0.1:8888/?p=809#comment-1743 This post absolutely fails to refute the value of the 'Silicon Valley' compensation scheme compared to the 'Wall Street' version. You spent 2/3 of the post criticizing the product development pattern of the Tech industry, which is inherently speculative (and revisionist); the compensation scheme has virtually nothing to do with this development pattern. An appropriate comparison/refutation would address the incentives produced under each scheme for a set of scenarios. Keep your eye on the ball. This post absolutely fails to refute the value of the ‘Silicon Valley’ compensation scheme compared to the ‘Wall Street’ version.
You spent 2/3 of the post criticizing the product development pattern of the Tech industry, which is inherently speculative (and revisionist); the compensation scheme has virtually nothing to do with this development pattern.
An appropriate comparison/refutation would address the incentives produced under each scheme for a set of scenarios. Keep your eye on the ball.

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