Pay and rational
Jinfo Blog

25th November 2008

By Tim Buckley Owen

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It’s scant consolation to anyone who has just lost their job in the credit crisis, or may be facing that prospect, that salaries in the specialist information profession have remained comfortably ahead of inflation – or that a period of enforced idleness will at least allow more time for reading and reflection. Yet, together, these observations offer something of potential value. It’s the 2008 Special Libraries Association survey (headline findings at http://digbig.com/4xxfa) that provides the evidence for the inflation-beating salaries – but what’s really interesting about the figures is the sharp differential recorded for those offering certain specialities. According to the SLA blog http://digbig.com/4xxfb respondents who cited competitive intelligence, research or analysis as their primary job responsibility – about 20% of the total – recorded a median salary of $69,000, compared with $66,000 for all the rest. These are the people who, at some time in their careers, have moved out of the infopros’ comfort zone of simple search and retrieval to stake their professional reputations on analysis and evaluation of what they find. And, as other recent findings suggest, such capabilities are as much art as science and by no means restricted to technocrats. I’ve been reading Niall Ferguson’s The Ascent of Money – both a book http://digbig.com/4xxfd and a TV documentary series on the UK’s Channel Four http://digbig.com/4xxfe. He offers some telling reasons why so-called experts frequently fail to make rational decisions – and the way they use information is at the heart of it. Availability bias causes us to base decisions on information that is readily available in our memories rather than the information we really need, Ferguson suggests. Confirmation bias inclines us to look for confirming evidence of an initial hypothesis rather than falsifying evidence that would disprove it, and contamination effects cause us to allow irrelevant but proximate information to influence a decision. By contrast, a recent paper from the London School of Economics’ Paul Woolley Centre (non-technical summary at http://digbig.com/4xxfg), snappily titled An Institutional Theory of Momentum and Reversal, suggests that upward or downward share price momentum, sometimes in defiance of economic reality, reflects not shareholder irrationality but the conflicting rational perceptions of investors and their fund managers. However this cuts little ice with the Economist magazine’s Buttonwood commentator http://digbig.com/4xxfh who suggests that ‘the idea that investors can occasionally become irrational seems both simpler and intuitively more appealing, especially in the light of recent events’. Esoteric stuff? It shouldn’t be. To emerge renewed from the current crisis, and ready to reap the rewards that the SLA survey demonstrates are achievable, we need to start thinking much more carefully about making the information we provide genuinely fit for use – and now might just be a good time to do it.

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