I was reading something today and something triggered my memory and I looked up this pearl of wisdom from St. Thomas Aquinas that I had forgotten. It is going to be added to my decision analysis course syllabus:
Never deny, seldom affirm, always distinguish
Lawrence Summers has an op-ed column in the NY Times about curriculum issues
http://www.nytimes.com/2012/01/22/education/edlife/the-21st-century-education.html?pagewanted=all
Here’s my favorite part:
6. Courses of study will place much more emphasis on the analysis of data. Gen. George Marshall famously told a Princeton commencement audience that it was impossible to think seriously about the future of postwar Europe without giving close attention to Thucydides on the Peloponnesian War. Of course, we’ll always learn from history. But the capacity for analysis beyond simple reflection has greatly increased (consider Gen. David Petraeus’s reliance on social science in preparing the army’s counterinsurgency manual).
As the “Moneyball” story aptly displays in the world of baseball, the marshalling of data to test presumptions and locate paths to success is transforming almost every aspect of human life. It is not possible to make judgments about one’s own medical care without some understanding of probability, and certainly the financial crisis speaks to the consequences of the failure to appreciate “black swan events” and their significance. In an earlier era, when many people were involved in surveying land, it made sense to require that almost every student entering a top college know something of trigonometry. Today, a basic grounding in probability statistics and decision analysis makes far more sense.
Decision analysis considers “framing” to be something important that can be easily overlooked (and lead to awful results). For example, a couple could consider the decision to be which house to purchase, framing the decision as an investment one. And miss the option of renting and investing the money in something besides real estate.
It is also true that people can find “meaning” in data that is nothing but random noise; or overlook important results that do not conform to the conventional wisdom. Treatment for ulcers falls into the latter category – the conventional wisdom about the cause of ulcers turned out to be false for many people.
Here is an interesting example of how we frame data. After you watch the video, make sure you go back and listen when the lyrics are not on the screen. They really are there! Or are they?
There is not enough information in this article to know the details, but the inventor of the PalmPilot has a new venture to model decision making.
Here’s a nice little article on using decision trees to predict football outcomes. Thanks JD!
UConn surprised everyone for a fourth-down conversion late in the game against Pittsburgh. Here’s the math for doing this more in football.
Here is an interesting interview with Michael Lewis about the financial meltdown. Part of it has to do with how so many people made so many dumb mistakes. I hope this makes people more skeptical of their decisions, and do a bit more analysis and think about how it could go wrong.
The “Top Gear” guy had a nice rant in the Times Online about laws to mitigate risks. Can we think of a way to connect the risk with the costs? Suppose that we could eliminate a risk entirely if everyone just paid a small price. Think polio, for example. Well, then what about this risk, or that risk. Surely the same solution applies, right? As Jeremy points out, we all take our shoes off at the airport now, so the terrorists decided to use their underwear. What will we have to do now, if risk elimination is the goal.
Or are there risks that we just have to live with? Where do we draw the line? Can we use probabilities and decision analysis to help make policies a little more bearable?
I teach quite a bit about structuring problems to help make decisions. Usually models can help illuminate the tradeoffs, and sometimes it becomes much more clear what the right strategy is.
But sometimes the downside of the “right” decision comes to dominate the thinking of the decision maker. This is a fundamental part of the dilemma facing the contestant on the game show Let’s Make a Deal when they are offered the chance to change their original decision. Even if they are better off changing, the emotional pain of changing and then losing makes them stay with their first choice. They can hear their friends saying “You won the car and then you gave it away.”
Here’s an interesting article about football coaches going for it on fourth down. I am not sure about all the details of the study, but it is probably true that the thought of what the sports writers and talk radio people will say play an important part of the calculations of when to try or punt.
Scott Adams has an interesting blog where he tries to reason his way through some of the issues of the day (a bit more seriously than in his cartoons). He has been blogging about all of the decisions associated with building his new house, and one of the big decisions is whether or not to use solar power.
Here is a post where he recognizes that the usual analysis (decision) about solar is just a choice of yes or no. This sounds okay, because you’re in the middle of building the house and have to make a decision, right?
Well, there’s another branch that people often overlook – wait and retrofit solar later. Nice observation, especially since that branch may be the best one.
I also can’t help but smile when I read the summary:
My new home will have solar power. It was a city requirement. I plan to brag about it to people who are passionate about the environment and bad at math.