Numbers and crunching

Two interesting articles from the latest Economist:

Business by numbers about the inreasing use of algorithms in business. While the examples are a bit trite (the Lune algorithm for credit card number check, for instance, which as far as I know has largely been replaced by a modulo 11 control in Europe) it is a nice overview.

Super Crunchers coverThe Death of Expertise, review of new book by Ian Ayres called Super Crunchers, about how more and more decisions are automated (since computers can do them better than humans) and how humans can be reduced to providing input parameters for automatic decision making. (Incidentally, the title was chosen with help from Google). First para: EVERY time a world-class chess player loses to a computer, humans die a little. In this book Ian Ayres, a professor of law and management at Yale University, explains how in many less high-profile endeavours, human intuition and flair are more easily beaten. The sheer quantity of data and the computer power now available make it possible for automated processes to surpass human experts in fields as diverse as rating wines, writing film dialogue and choosing titles for books.

This is something we have talked about in my research project on search: How approaches based on improving decisions based on capturing user reactions (such as the music site last.fm) win over categorization-based schemes (such as pandora.com) even though the former sometimes make stupid decisions (such as grouping music together because the artists come from the same city.).

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