Dennis Alexis Valin DittrichThe Benefits and Dangers of #DecisionMmaking by Algorithm https://conversableeconomist.com/2025/03/27/the-benefits-and-dangers-of-decision-making-by-algorithm/
"Even if the #algorithm does a better job than most humans, some humans will do better than the algorithm.
The gain from using algorithms in many contexts is relatively small in percentage terms, although a small percentage gain applied to a large number of people can certainly be meaningful.
People are more unforgiving of algorithmic error than of human error.
Greater complexity will limit the benefit of an algorithm.
Algorithms are not good, and perhaps cannot be good, at what are sometimes called path-dependent events"
#BoundedRationality #bias #heuristic
"Even if the #algorithm does a better job than most humans, some humans will do better than the algorithm.
The gain from using algorithms in many contexts is relatively small in percentage terms, although a small percentage gain applied to a large number of people can certainly be meaningful.
People are more unforgiving of algorithmic error than of human error.
Greater complexity will limit the benefit of an algorithm.
Algorithms are not good, and perhaps cannot be good, at what are sometimes called path-dependent events"
#BoundedRationality #bias #heuristic
The Benefits and Dangers of Decision-making by Algorithm - Conversable Economist
It's crystal-clear that decision-making by algorithm can be imperfect. It's also crystal-clear that decision-making by humans can be pretty imperfect, too. However, the imperfections across these two types of decisions are probably not the same. How and when should society make use of decision-making by algorthm? Cass R. Sunstein provides a thoughtful overview in "The