By |Published On: June 11th, 2013|Categories: Behavioral Finance|

http://www.aeonmagazine.com/world-views/steven-poole-can-algorithms-ever-take-over-from-humans/

A great article by Steven Poole.

He highlights what Turnkey readers are slowing learning via our Models vs. Experts series:

Speaking to the evidence that models beat experts in determining repeat offenders:

In Baltimore and Philadelphia, software is already being used to predict which prisoners will re-offend if released. The software works on a crime database, and variables including geographic location, type of crime previously committed, and age of prisoner at previous offence. In so doing, according to a report in Wired in January this year, ‘The software aims to replace the judgments parole officers already make based on a parolee’s criminal record.

But computers can’t enjoy and understand books like expert critics? …wrong.

In the early days of Amazon, the company employed a panel of book critics, whose job was to recommend books to customers. When Amazon developed its algorithmic recommendation engine — an automated system based on data about what others had bought — sales shot up. So Amazon sacked the humans.

Need a psychotherapist?

A new wave of smartphone apps with eccentric titular orthography (iStress, myinstantCOACH, MoodKit, BreakkUp) promise a psychotherapist in your pocket. Thus far they are not very intelligent, and require the user to do most of the work — though this second drawback could be said of many human counselors too.

Anyway, a fascinating article.

When are you eating humble pie and joining the algorithm-based decision-making revolution?

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About the Author: Wesley Gray, PhD

Wesley Gray, PhD
After serving as a Captain in the United States Marine Corps, Dr. Gray earned an MBA and a PhD in finance from the University of Chicago where he studied under Nobel Prize Winner Eugene Fama. Next, Wes took an academic job in his wife’s hometown of Philadelphia and worked as a finance professor at Drexel University. Dr. Gray’s interest in bridging the research gap between academia and industry led him to found Alpha Architect, an asset management firm dedicated to an impact mission of empowering investors through education. He is a contributor to multiple industry publications and regularly speaks to professional investor groups across the country. Wes has published multiple academic papers and four books, including Embedded (Naval Institute Press, 2009), Quantitative Value (Wiley, 2012), DIY Financial Advisor (Wiley, 2015), and Quantitative Momentum (Wiley, 2016). Dr. Gray currently resides in Palmas Del Mar Puerto Rico with his wife and three children. He recently finished the Leadville 100 ultramarathon race and promises to make better life decisions in the future.

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