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Big Data Is Great, but Don't Forget Intuition - NYTimes.com

The quest to draw useful insights from business measurements is nothing new. Big Data is a descendant of Frederick Winslow Taylor's "scientific management" of more than a century ago. Taylor's instrument of measurement was the stopwatch, timing and monitoring a worker's every movement. Taylor and his acolytes used these time-and-motion studies to redesign work for maximum efficiency. The excesses of this approach would become satirical grist for Charlie Chaplin's "Modern Times." The enthusiasm for quantitative methods has waxed and waned ever since.

Big Data proponents point to the Internet for examples of triumphant data businesses, notably Google. But many of the Big Data techniques of math modeling, predictive algorithms and artificial intelligence software were first widely applied on Wall Street.

At the M.I.T. conference, a panel was asked to cite examples of big failures in Big Data. No one could really think of any. Soon after, though, Roberto Rigobon could barely contain himself as he took to the stage. Mr. Rigobon, a professor at M.I.T.'s Sloan School of Management, said that the financial crisis certainly humbled the data hounds. "Hedge funds failed all over the world," he said.

The problem is that a math model, like a metaphor, is a simplification. This type of modeling came out of the sciences, where the behavior of particles in a fluid, for example, is predictable according to the laws of physics.



'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty
by melo (melometa4(at)gmail.com) on Wed Jan 2nd, 2013 at 09:36:11 PM EST
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... the behavior of particles in a fluid, for example, is predictable according to the laws of physics.

In what Universe?

She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre

by ATinNM on Thu Jan 3rd, 2013 at 12:53:38 PM EST
[ Parent ]

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