Image by ~jjjohn~ via FlickrPeople love models, especially when they’re big, complex and
quantitative. Models make us feel safe. They take the uncertainty of
the future and break it down into neat, bite-sized equations. But
here’s the problem with models, which is really a problem with the
human mind. We become so focused on the predictions of the model - be
it the cod population, or the risk of mortgage derivatives - that we
stop questioning the basic assumptions of the model. (Instead, the
confirmation bias seeps in and we devote way too much mental energy to
proving the model true.) It’s not just about black swans or random
outliers. After all, there was no black swan event that triggered this
most recent financial mess. There was simply an exquisite model,
churning out extremely profitable predictions, that happened to be
based on a false premise.
- Jonah Lehrer in Dangerous Models
![Reblog this post [with Zemanta]](http://img.zemanta.com/reblog_e.png?x-id=a06047fd-b5bf-4f02-9a4e-ad9b46a2328f)
![Reblog this post [with Zemanta]](http://img.zemanta.com/reblog_e.png?x-id=9d82e005-75ef-4e53-977e-b56f39ebecf1)
![Reblog this post [with Zemanta]](http://img.zemanta.com/reblog_e.png?x-id=0dda7594-f675-4b81-b6fc-969ed4555959)

