Book Review: Supercrunchers

1. In Chapter 5, of Supercrunchers, "Experts versus Equations", the author makes a great case for the fact that equations predict better than humans. What reasons does the author give that illustrate why a human cannot make predictions as well as an equation? Reason 1: the human mind tends to suffer from a number of well documented cognitive failings and biases that distort our ability to predict accurately. Reason 2: Once we form a mistaken belief about something, we tend to cling to it. We are likely to discount disconfirming evidence and focus instead on evidence that supports our preexisting beliefs. Reason 3: Most people are overconfident while they make prediction to the future while some people tend to be underconfident and slow to change in the face of new evidence. And overconfidence becomes severe when the problems become more complicated.

2. The author suggests that equations should not be without some kind of "over ride" capability. What is the “over ride” capability? Why does the author suggest this is necessary? Do you agree or disagree with this. Answers: “Over ride” capability refers to some kind of discretionary escape hatch --- some way for a human to override the prediction of the formula. Just like the rejection area of hypothesis test. It is necessary because a statistical procedure cannot estimate the causal impact of rare events because there simply aren’t enough data concerning them to make a credible estimate. The rarity of the event doesn’t mean that it will not have a big impact when the event does in fact occur. It just means that statistical formulas will not be able to capture the impact. In such case, a “over ride” capability is needed. I agree with this point because it is common in the day to day life. We need to find out when does the statistic way loose effectiveness. Every method has its own drawback; we need to figure out a systematic way to “automatically” reflect the time that a statistic method fails.

3. The author puts