Minds and machines: the art of forecasting in the age of artificial intelligence. (2016)
“…judiciously constructed predictive models can augment human intelligence by helping humans avoid common cognitive traps.”
James Guszcza, US chief data scientist of Deloitte Consulting; & Nikhil Maddirala, management consultant.
Deloitte Review, Issue 19, 25 July 2016.
“Forty years of behavioral science research into the psychology of probabilistic reasoning have revealed the surprising extent to which people routinely base judgments and forecasts on systematically biased mental heuristics rather than careful assessments of evidence.
“These findings have fundamental implications for decision making, ranging from the quotidian (scouting baseball players and underwriting insurance contracts) to the strategic (estimating the time, expense, and likely success of a project or business initiative) to the existential (estimating security and terrorism risks).
“The bottom line: Unaided judgment is an unreliable guide to action.
“…. A body of research dating back to the 1950s has established that even simple predictive models outperform human experts’ ability to make predictions and forecasts. This implies that judiciously constructed predictive models can augment human intelligence by helping humans avoid common cognitive traps.
“…. We overgeneralize from personal experience, act as if the evidence before us is the only information relevant to the decision at hand, base probability estimates on how easily the relevant scenarios leap to mind, downplay the risks of options to which we are emotionally predisposed, and generally overestimate our abilities and the accuracy of our judgments.
“It is difficult to overstate the practical business implications of these findings.”
Access the full article here: Minds and machines.