“It’s Hard to Make Predictions, Especially About the Future.”

April 5th, 2011

The title of this post, a quote apocryphally attributed to the great Yankee Yogi Berra, accurately assesses the inability of the human mind, and even those of so-called “experts” to make accurate predictions about the future. I write about this concept at great lengthy in my forthcoming piece on FantasySCOTUS (it should be ready this week). Here is a sample:

The title of this section, apocryphally attributed to Yogi Berra, recognizes the inability of the human mind to make predictions about the future: simply put, “we just can’t predict.” While it is quite difficult for an individual to make predictions about the future, crowds, pooling together their collective knowledge and wisdom, are able to generate accurate predictions about unknowable events.

“The ‘wisdom of crowds’ is generally more accurate and more objective than the judgment of one uninformed ‘expert.”’ Perhaps the most popular example of the wisdom of the crowds is the “Ask the Audience” lifeline on the game show Who Wants to Be a Millionaire. If the contestant on the show is unable to answer a question, she can pose the question to the audience. Instantly, the votes of each member in the audience are displayed on a screen. In over 90% of the episodes, the audience, which possesses a wide swath of knowledge, provides a correct answer where the individual, who possesses a narrower range of information, could not. Indeed, “[u]ncertainty is a painful part of reality; it is only natural that the wisdom of the crowd would be summoned to battle it.”

And no post on decisions by crowds would be complete without a little Hayek homage:

Nobel laureate F.A. Hayek, in discussing the value of spontaneity and local knowledge, postulated that crowds, acting through markets, are better positioned to make choices than individuals who lack local knowledge. In Hayek’s words, devices such as markets are “orderly structures which are the product of the action of many men but are not the result of human design.”

For now, sate yourself on Ronald Bailey’s review (with the Berra quote for a title) of Future Babble: Why Expert Predictions Are Next to Worthless, And You Can Do Better by Dan Gardner. Here’s a taste:

In Future Babble, Gardner acknowledges his debt to political scientist Phililp Tetlock, who set up a 20-year experiment in which he enrolled nearly 300 experts in politics. Tetlock then solicited thousands of predictions about the fates of scores of countries and later checked how well they did. Not so well. Tetlock concluded that most of his experts would have been beaten by “a dart-throwing chimpanzee.” Tetlock found that the experts wearing rose-tinted glasses “assigned probabilities of 65 percent to rosy scenarios that materialized only 15 percent of the time.” Doomsters did even worse: “They assigned probabilities of 70 percent to bleak scenarios that materialized only 12 percent of the time.”

In other words, chill, and don’t worry so much about black swans. (You see how I connected two areas I’m researching; I’m not mad, all my writings really are related). Horrible things will happen, and we are incapable fo predicting them (no matter how much experts doth protest), so relax.