(draft)
#Informed Economic Analysis#
When you make a request for a change to the site or to some other internal process/ procedure, please provide "Informed Economic Analysis" about why this change should or shouldn't be made.
Here is an example of what he is looking for when he requests an Informed Economic Analysis. Taken from a Slack conversation on 3/11/2015 between @ezl and @theora and edited for clarity.
Proposed Change: when landlords "reject" an application, they have the ability to send an adverse action notice template or an email in their own words. In both instances, they do not have the option to send a copy of this email to themselves nor to see the content that was created by the adverse action notice template. A customer wrote in and asked that we give her the ability to copy herself on rejection emails.
theora: There is 0 benefit to us for creating that feature, as we do not make any money off of it and wouldn't be involved in a lawsuit if there was one.
eric: Well, in fairness, I don't think its zero. I mean, we DO have risk aversion, so I'd eval it like this:
2 versions of the world:
(A) we don't add this feature:
- costs nothing to develop
- 99% chance nothing ever happens, in which case, there are no negative impacts/costs
- 1% chance some landlord gets sued by applicant as per your description
(B) we DO add this feature:
- costs some non-zero amount to develop (less than $300)
- 99% chance nothing ever happens, in which case, we basically lose $300 today
- 1% chance something DOES happen (landlord gets sued)
So my question is: In the 1 % chance in that either case (A) or (B) occurs, what happens?
- Case (A) landlord gets sued, he does NOT have a copy of the rejection letter. Does the applicant have a copy? How does having a copy help the landlord after he is sued? Whatever the applicant claim is, if the landlord rejected the applicant for sue-worth reasons, if its documented in the letter, the applicant MUST have a copy to use it, in which case the landlord will get it. If the applicant is suing for reasons OUTSIDE the letter, then having the letter doesn't help. Regardless, the landlord could be irrationally mad at us though (this is a real impact, but not unique to case A).
- In case (B) landlord gets sued and DID have the ability to send himself a copy.But even then, if we DO implement the feature, there's still a chance that the landlord opts OUT of receiving the cc, or deletes it. So in those cases, we paid $300 for dev, but we didn't get any benefits. Even if they DID send themselves the email, the question goes back to case (A) - how did that help the landlord protect himself? (again, the landlord can be irrationally upset at us, but since both cases have that risk, we can't count it as a reason to choose one path over the other).
theora: So, bottom line, it may be in the landlord's best interest to C) write his or her own rejection letter in a separate email outside of Rentapp.
eric: Generally, this is actually my decision making process btw. "Informed economic analysis" is basically another way of saying:
Let's imagine 2 possible future worlds (like we're doing some Back to the Future stuff):
- one where we do nothing
- one where we do the proposed change
Then analyze: is world No. 2 definitely better? possibly better? definitely worse? The answers to those questions define the action.
This is basically how all financial planners at corporations behave. The important part is to compare each possible world down to a single metric that we care about and find out which one has more "points". Points are usually in dollars; warm fuzzies are ok too, but you just have to be clear what criteria you're using to measure. No situation is ever "just better" than another. It's "just better [if measured in XXXX]" (i.e. measured in vin diesel movies).