Economists Are Overconfident. So Are You

HBR blogger, Justin Fox, provides a great explanation in "Economists Are Overconfident. So Are You" for why you need to report insights with graphs, not just numbers or even no numbers at all. Here's the key take-away for you:

They paid too much attention to the averages, and too little to the uncertainties inherent in them, thereby displaying too much confidence.

Hypothesis Driven vs. Data Driven Analytics

We're having an excellent discussion at the LinkedIn discussion group
Advanced Business Analytics, Data Mining and Predictive Modeling on the topic of
"Hypothesis Driven Vs. Data Driven Analysis - Which do you support? Throw it all in the black box (computational) and see what you get or lets define the problem and seek data to analyze (traditional)."

If you have thoughts or guidance on this, you ought to join us or comment here.

Fear and Loathing in Las Vegas with Reverend Bayes

A trip to Vegas, an evil clown, a bizarre coin, and a minister. What could go wrong?

I commented in a footnote of an earlier post that one of my favorite – no, morally obligated – questions to ask when faced with imposing assertions or risky plans is: “How do you know that?” If we could but practice the discipline to ask this question more often with greater courage and rigor, I think it would lead us to less intrusive and ineffective public policy decisions, assertions of power over those we distrust, or costly commitments to action based solely on untested gut feel or intuition alone.

Please, don’t misunderstand me. I think intuition or gut feel plays a very important place in many areas of life, including business, science, mathematics, policy making, cooking, career choices, and a hundred more. In fact, I’m pretty sure that all progress and innovation occurs, in part, because of an initial intuition or hunch that arises in the mind of an interested inquirer. The question, though, is what do we do with such a hunch when we face critical or risky decisions? Do we Farragut ahead without regard to the possible risks, damning the torpedoes, or do we attempt to answer the question, “How do I know that?” and consider the implications of our intuition before we act?

Reverend Thomas Bayes: evil clown fighter.

Fortunately, we have a tool, Bayes’ Theorem (named after the Reverend Thomas Bayes, who left this intellectual gem behind after his death in 1761), to integrate our intuition and systematic inquiry in a logically powerful way. Read more...

Dare to Disagree

I thought this TED talk by Margaret Heffernan was great and complementary to the blog post I wrote: Ain't I Got a Right to be Wrong?