Monday, January 19, 2009

Super Crunchers: Chapter 7

The following summary was written by Frank Voisin, who regularly writes for Frankly Speaking. Recently, Frank sold four restaurants and returned to school to complete a combined LLB/MBA.

As you can tell by this point in the book, super crunching is having a profound effect on our lives, whether we like it or not. Ayres gives examples in this chapter of who is losing out due to super crunching. Doctors and other intuitivists are losing out as the status of these professions decreases in relation to the awesome power of super crunching.

The problem is that experts tend to give settled answers that leave us feeling a sense of closure. Super crunching gives odds, which leave us unsettled and unclear about what will happen. This is more accurate, but people aren’t used to this.

We should see statistical decision making as the rise of meritocracy. Intuitivists are often praised for their historical record, and earn high fees on their future performance even though this is unreliable (See my review of Nassim Nicholas Taleb’s Fooled by Randomness for further discussion of the problems of confusing past performance with skill!), whereas statistical decision-making minimizes the chances of failure - let the best ideas (statistically) succeed, regardless of who put them forward!

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