⛱ How To Quickly Understand Ai: In Just 2 Minutes!
"Imagination Decides Everything" [Blaise Pascal]
Can a simple framework change your life?
Doubtful. But it can change the way you think. Which can change the way you act.
Here's a simple way to understand all the excitement around Ai or Artificial General Intelligence: Decisions = Predictions + Judgement [interpreted from the works of Joshua Gans]
Predictions & Judgements Role in Decision Making:
Predictions: Predictions play a significant role in forecasting, helping businesses and policymakers to anticipate potential future outcomes. These are essential in formulating strategies and policies based on statistical evidence.
Judgement: Judgement, on the other hand, is vital in situations where the available data is limited or when navigating uncharted territories. It allows for a more flexible approach, adapting to changing circumstances and leveraging expertise to make informed decisions.
The Four Elements of Decision Making
Data: Objective [ish] Inputs
These are the raw inputs into our decision making. The can be detailed statistical charts or simply one or two events.
Predictions: Objective [ish] Outputs
Predictions are based on the analysis of data and statistical models or just hunches in the absence of data. They are data-driven and are generally precise, giving a concrete outlook based on historical data and current trends. W
Judgement: Subjective Inputs
Our judgement is informed by experience, expertise, and intuition. It considers not only the data but also the broader context.
Decision: Subjective Outputs
After weighing up the predictions and then overlaying our judgement, we come to our final decision.
Takeaway:
Ai will not replace you, or your judgement. But it can replace the prediction element of your decision making. Ai is a prediction machine, not a decision making machine.
Example: The Weather
Let’s take the weather as an example. For many years whether by TV or now, via Apps, we have weather forecasts at our fingertips.
These forecasts are made bottom up by:
Data collected by weather companies
Predictions are then made by their weather algorithms. 90% chance of rain in London W1 and all that.
We then receive these predictions via our Apps and then use our judgement on how correct the prediction is. Sometimes by just using our gut or looking outside.
This then leads to our decision on whether or not to lug around a big umbrella all day. We make a judgement call, that is.
Data feeds Predictions. Predictions + Judgement = Decision
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