Oenophiles are easily outraged, in the estimation of Ian Ayres. Not because the word sounds so shameful, but because wine gurus (?oenophiles? if you insist) have reacted with utmost anger to the disruption of their merry bouts of sniffing and swirling brought about by a spoilsport statistical formula for wine quality. At one time, it took a majestic nose and mystical talent to pick the best vintages. Now you just plug the vineyard harvest year?s temperature and rainfall data into a formula, and it crunches out a number that actually predicts the eventual wine?s market value on maturity with amazing accuracy. Data patterns reveal that hot summers and sparse rain result in well ripened and juicily concentrated grapes, writes Ayres, and that?s basically all there is to it. Scientific validation is a reward in itself ? forget all the ?full-bodied? vinobabble that somehow managed to pass down the generations.
So far, so progressive. Ayres is a professor of both law and business at Yale, and leaves few other niches untouched in this book to show how touchy-feely masters of intuition are being ousted by computer-aided crunchers of numbers in field after field of expertise. The American retailer Wal-Mart, for example, has more than 570 terabytes of data to work on, which is how it knows in advance what food to rush into hurricane paths. A microfinance bank in South Africa figured that using a simple picture of a smiling woman on a loan solicitation letter raises the male customer response rate by as much as an interest rate cut of 4.5%. Who?d have guessed? Statistics can boost profits big time. Fairness cream marketers have their own tales of counterintuitive success. Why, even this book?s title was pre-tested via Google AdWords. Super Crunchers Beat The End of Intuition, and was selected unblinkingly on the assurance of a better chance of maximising bookstore sales.
This book also deals with the subject of statistical probability, though with none of the self-effacing charm of NN Taleb in Fooled By Randomness. To his credit, Ayres does acknowledge the limits of his subtitle?s grand assertion that ?anything can be predicted?. As with Malcolm Gladwell?s Blink, this flicker of self-doubt only makes it all the more readable. It also gives the book?s opening sequence quite another context in retrospect. You see, calling the half-life of nuclear material correctly is a question of scientific knowledge, but no statistical crystal ball can possibly forecast the popular response to a work of artistic fiction. Ayres cites the example of a formula devised to pick bestsellers that gave The DaVinci Code a lousy chance of cracking the market. The novel went on to sell more than 40 million copies. Likewise, any analysis of past cinema successes in India would?ve put steep odds on sequels and movies that speak of more to come. But dream runs are dream runs.
There are always unlikely events at the tail ends of the ?bell curve? of likelihoods, and Super Crunchers duly takes these into account ? both the good and the bad. Even after the empirical stuff is done and gone, there?s much that remains which could be risky as hell. Are our super crunchers paying attention? In a chapter entitled, ?Who?s Doing Your Thinking For You??, Ayres suggests that computer programs are hot on the offbeat trail of Internet behaviour as well: ?Collaborative filters let sellers access what Chris Anderson calls the ?long tail? of the performance distribution? At Pandora.com, users can type in a song or an artiste that they like and almost instantaneously the website starts streaming song after song in the same genre.? It has all been worked out behind the screen. At least technically speaking. And guess what, you?ve been a collaborator too. Sort of? But does it have your consent? That?s the big question.
There still exist unknown unknowns around us, and for this reason alone, decisions devoid of intuition and/or empathy could be disastrous beyond a point. I don?t know about you, but I am inclined to trust my hunch on this. The hunch? Think it over. Unhastened. As Alf may say, ?What, me hurry??