Wal-Mart provides store managers with some discretion to set prices for a variety of popular items they carry because demand is influenced mostly by local conditions that managers are more aware of. To help ensure that managers use this discretion wisely, managers are compensated with bonuses based on quarterly sales. With improvements in collecting and analyzing data, the “quantitative analysists” in corporate offices can now run many small experiments with specific data. Doing so allows them to understand nuanced patterns in consumer demand that had been un-noticed previously. How should this affect manager compensation? Describe your reasoning for any suggested changes.
