Quote of the day

Following up on my earlier Super Crunchers post, Peter Levin asks (actually, he did this back in June), "Does Information-mining displace decision-making?"

At what point, though (and this is the general question), does information mining actually replace decision-making? In sociology, C. Wright Mills made the argument a half-century ago, this is leads to the vacuousness of abstracted empiricism. In business decision-making, it leads to an abdication of decision-making in favor of empirical data mining. The problem here (following James March) is that the world is not just uncertain, it is ambiguous. If the world were simply uncertain, reduction of uncertainty via the aggregation of more and better information might prove just the ticket. But what happens when a decision has to be made between qualitatively different options? When more information does not provide a clear direction to go? Or when decision-making could actually increase, decrease, or change in fundamental ways the options themselves? At this point, information-mining actually becomes harmful to the extent that it replaces rather than augments real decision-making. Worse, making decisions is a skill, that needs to be flexed, and used. Understanding when and how information-mining would be useful seems to me a more important ability than even knowing how to manage the information-mining itself.

I need to go back to The Black Swan and see what Nassim Nicholas Taleb says about the role of automated trading in exacerbating financial crises. His big argument is that black swans are fewer but worse in today's more precisely-managed economies and societies: to build on Peter's observation, does he argue that efforts to generate certainty distract us from the continuing existence of ambiguity-- and perhaps even make those ambiguities bigger and more dangerous, even while we focus on the computer model?

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