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Business, Science

Why so many predictions fail – and some don’t

“Why So Many Predictions Fail — but Some Don’t” is a new book by Nate Silver on the science of extracting information from noisy data.

Why are we so rarely able to make rational predictions about the future? Partly it is because:

  • We are fooled into thinking that random patterns are meaningful
  • We build mental models that are far more sensitive to our initial assumptions than we realize
  • We make approximations that are cruder than we realize
  • We focus on what is easiest to measure rather than on what is important
  • We are overconfident
  • We build models that rely too heavily on statistics, without enough theoretical understanding
  • We unconsciously let biases based on expectation or self-interest affect our analysis

To learn more, follow the link:

http://www.nytimes.com/2012/10/24/books/nate-silvers-signal-and-the-noise-examines-predictions.html?smid=tw-share

 

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