« Freakshow finance | Main | Philip Pullman is a jerk »
November 30, 2005
An expert has is just someone who has made all the mistakes in a narrow area
I just finished reading Gladwell's Blink last weekend, so the idea of the predictive power of expertise and the amount of information required to power that expertise has been on my mind. Another New Yorker journalist, Louis Menand, has a slightly different take. In his article "EVERYBODY’S AN EXPERT", he sees "that people who make prediction their business—people who appear as experts on television, get quoted in newspaper articles, advise governments and businesses, and participate in punditry roundtables—are no better than the rest of us. When they’re wrong, they’re rarely held accountable, and they rarely admit it, either. They insist that they were just off on timing, or blindsided by an improbable event, or almost right, or wrong for the right reasons. They have the same repertoire of self-justifications that everyone has, and are no more inclined than anyone else to revise their beliefs about the way the world works, or ought to work, just because they made a mistake." Worse, he sees experts as over informed. All that extra data just gives them a wider selection with which to paint flights of fancy. Jane Galt has an explanation that reads more true. Experts aren't usually paid to be right, they are paid to be entertaining.
A special case of this is the financial markets. While many people are paid to both be entertaining as well as make money in financial markets, their ability to place financial bets actually alters the likelihood of certain outcomes. IF everyone believes that stocks will go up and so buys stock, then stock will go up. I'd expect to see the greatest difference in prediction quality between experts and laymen when:
1) A unique true outcome can be established
2) Markets exist in the prediction
3) Those markets cannot really effect the outcome.
Science is a clear example of this. Predict what difference, if any in the time for two smooth balls, one wood and the other lead are rolled down a smooth slide to reach the bottom. The public didn't believe Galileo and they'd likely get it wrong again today.
Posted by OneEyedMan at November 30, 2005 4:57 PM
Comments
Post a comment
Thanks for signing in, . Now you can comment. (sign out)
(If you haven't left a comment here before, you may need to be approved by the site owner before your comment will appear. Until then, it won't appear on the entry. Thanks for waiting.)