Friday, October 21, 2005

Who needs perfect decisions?

What is a perfect decision? Can a computer do that for us?

Arbitrating commodity trades and other decisions that best optimize probability of successes are currently permeating towards the use of sophisticated computer programs that run on state of the art number crunching hardware. I was reading a magazine that was mentioning that computers might soon take over stock traders in better handling bull-sell decisions. Humans are inevitably susceptible to emotions. I know for sure that when I listen to techno, I drive like a maniac. I know for sure that when I received a hefty speeding ticket 4 months ago, I started splurging my money on myself to make myself feel better. However, the science of probability is arcane. For example, in the casino, I knew the house had a calculated advantage of 5.4% for the game of black jack but that number comes from pure science. It might be true, if I played with a cold-hard-computer brain, making all the "right" (who knows what right is) decision for 1,000,000 games, the house might have that 5.4% advantage. On the contrary, I played with emotions, I doubled down when I shouldn't and won. I hit when I shouldn't and won and I played right and hit when I should and stayed when I should and lost. So there isn't a right or wrong decision. A computer can't be better than me in making these decisions. Same applies to arbitrating trades, selling stocks, making decisions to send cruise missiles to a vital installation as a strategic decision backed up by computer simulation. There is a limit to what a cold mechanical machine can decide for you. The limit on what a human brain that is typically clouded with thoughts of beer, cars, sex, relationship, food, soccer, TV, etc. can do is almost boundless.

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