Column: Does big data have us ‘Fooled by Randomness’?
Nassim Nicholas Taleb achieved notoriety with several books written before the housing crisis, criticizing the financial industry for putting so much faith in its predictions.
He argued in “Fooled by Randomness” that there are problems with our attempts to understand the past, and even larger issues when we use it to predict the future.
Those criticisms turned out to be justified.
"Big data" is allowing more industries to try their hand at fortunetelling.
With social media and portable devices, we can watch society just like traders watch the stock market. People can be measured, quantified, modeled.
As we enter this brave new world, it’s worth considering some of Taleb’s points and seeing how they might apply to big data.