Is thinking by numbers the new way to be smart?

Most of the people who shop online are now used to the recommendations that they see on their page based on previous purchases. And this is not just purchases, recommendations for movies on Netflix is another place where one sees the usual, you might enjoy / you might be interested in / you might want to buy sort of recommendations. And at times, they do reveal some interesting nuggets of information – information that the consumer otherwise would have little knowledge of (like finding a less known book on Amazon based on your purchase of a book in one subject).

So, the question one would ask is, how are these recommendations created? And part of the answer lies in the book by Ian Ayres – Super Crunchers. The part of the answer that lies in this book is the what instead of the how. The author is an econometrician and hence don’t expect any number crunching algorithms in the book. Rather the book is a monograph on the subject of number crunching to help businesses in various decision making.

The author does take the reader through an interesting journey of where all number crunching is being used and their potential implications. He talks about the constant strife between the intuitionist and the number crunching analyst. He augments that strife with a lot of examples, examples from industries as diverse as the medical diagnosis to Hollywood scripts. From concentrated government spending1  to affects of direct instruction. All and more of areas in our everyday life are discerned by the author to show how the decision making is being wrested by the super-cruncher. He also talks about the mistakes that can happen due to the number crunching (talks about Acxiom – one of the biggest companies you haven’t heard of  and Choicepoint) and the potential implications.

All in all, it is an interesting read. If you are tech-savvy then most of what the author mentions might not be new news to you. But what is important and that is the key point of the book I think is that the author concentrates on the implications of number-crunching. One of my favourites is the personalized news engine. If at all the news portals could narrow down the news that can be delivered to a user (given the user’s preferences), then wouldn’t that create a myopic view of the world for the reader? For example, if I am interested only in politics and technology wouldn’t I be missing a lot of important news (say) about world events? Then wouldn’t my judgement of things be severely biased? And what happens if a society as a whole starts to behave that way? In the same vein, if the marketers are able to cater to each user (given each user’s preference), then, can it happen that the firms of tomorrow can succeed in catering their message to the viewer? Sociologically, the implications of such a situation are not small. Like the PBS documentary – The Persuaders, mentions, could it be that common good will make place for individual preference? After all, if there is somebody willing to listen and cater to each one of us separately will we have a problem with that?  Something to be pondered about isn’t it?

My rating for the book a 7 out 10. The flip side of the book being that sometimes there seems to be no strong link across the chapters. Even though it is all about super-crunching, there were times I felt the discussion drifted away. The upside is that this is not a voluminous book and is definitely an interesting read. So pick it up when you get time.

1. In Season 1, Ep11of Numb3rs, Charlie Epps tries to solve a murder of someone using Sabermetrics to decide on federal spending. Even though this is fiction, it also shows the interest governments have in number crunching to decide on welfare programs.