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Compare and Contrast Between Duty Ethics and Divine
Command
Duty Ethics is the ethical theory that was began with the
teaching of Immanuel Kant, who was a German philosopher
that lived from 1724 to 1804. He believed that a sense of duty
should be the main concept of a person’s beliefs. Basically,
Kant believed that a person should be guided by principles that
they would like everyone else to live by.1 In the theory of duty
ethics, a person is to act in a certain way, because it is
the correct way to act. Duty ethics define the good as
treating others in a respectful humane manner, since that is how
you would want to be treated. A weakness of the
Duty Ethics theory is that not every person has the same
understanding or belief of what is right or wrong.
Divine Command is that ethical theory that believes what is
good is good because it was commanded by God.2 As it
explains in a conversation someone had with Jesus, in Matthew
19:17. “Why do you ask me about what is good? He said to him.
“There is only one who is good. If you want to enter life, keep
the commandments.”3 This theory teaches that people cannot
live a moral life, unless they follow the moral teachings of
God.4 A weakness that I think the Divine Command
theory has is that if a person is not a believer, why would they
follow the instructions of the deity giving the commands? When
God created humankind, He gave us the freedom of choice.
With this choice He also instilled in us the
basic understanding of what is morally right or wrong.
Both theories teach us to do what is right, to treat
other people, how we would want to be treated, with kindness
and respect. Duty Ethics Theory teaches us to do the right thing
no matter what the outcome is. Divine Command Theory teaches
to what is right because it is what God
commanded. Another difference is where Duty Ethics can
change with the morals of society, Divine Command does not
change because God’s commands do not change.
The Divine Command Theory is a stronger ethical theory than
Duty Ethics Theory. It is the stronger theory, because it teaches
people to follow the commandments of God and the teachings of
the Bible. When a person follows the teaches of God and the
bible, they will have a stronger understanding of what is
morally right and wrong. With this understand they will make
better ethical choices and decisions. Through these teachings we
know that it is not right to cheat, steal, or commit murder,
et cetera. The commandments and the instructions of God and
the Bible are not open to change and cannot be change in order
to fit the circumstances. When a person follows
these commandments, they can live a life that is both morally
ethical and pleasing to God.
REPRINT H04NSZ
PUBLISHED ON HBR.ORG
NOVEMBER 19, 2018
ARTICLE
DECISION MAKING
Why “Many-Model
Thinkers” Make Better
Decisions
by Scott E. Page
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This document is authorized for educator review use only by
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Mar 2019. Copying or posting is an infringement of copyright.
[email protected] or 617.783.7860
DECISION MAKING
Why “Many-Model
Thinkers” Make Better
Decisions
by Scott E. Page
NOVEMBER 19, 2018
“To be wise you must arrange your experiences on a lattice of
models.”
— Charlie Munger
Organizations are awash in data — from geocoded transactional
data to real-time website traffic to
semantic quantifications of corporate annual reports. All these
data and data sources only add value
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[email protected] or 617.783.7860
if put to use. And that typically means that the data is
incorporated into a model. By a model, I mean
a formal mathematical representation that can be applied to or
calibrated to fit data.
Some organizations use models without knowing it. For
example, a yield curve, which compares
bonds with the same risk profile but different maturity dates,
can be considered a model. A hiring
rubric is also a kind of model. When you write down the
features that make a job candidate worth
hiring, you’re creating a model that takes data about the
candidate and turns it into a
recommendation about whether or not to hire that person. Other
organizations develop sophisticated
models. Some of those models are structural and meant to
capture reality. Other models mine data
using tools from machine learning and artificial intelligence.
The most sophisticated organizations — from Alphabet to
Berkshire Hathaway to the CIA — all use
models. In fact, they do something even better: they use many
models in combination.
Without models, making sense of data is hard. Data helps
describe reality, albeit imperfectly. On its
own, though, data can’t recommend one decision over another.
If you notice that your best-
performing teams are also your most diverse, that may be
interesting. But to turn that data point into
insight, you need to plug it into some model of the world — for
instance, you may hypothesize that
having a greater variety of perspectives on a team leads to
better decision-making. Your hypothesis
represents a model of the world.
Though single models can perform well, ensembles of models
work even better. That is why the best
thinkers, the most accurate predictors, and the most effective
design teams use ensembles of models.
They are what I call, many-model thinkers.
In this article, I explain why many models are better than one
and also describe three rules for how to
construct your own powerful ensemble of models: spread
attention broadly, boost predictions, and
seek conflict.
The case for models
First, some background on models. A model formally represents
some domain or process, often using
variables and mathematical formula. (In practice, many people
construct more informal models in
their head, or in writing, but formalizing your models is often a
helpful way of clarifying them and
making them more useful.) For example, Point Nine Capital
uses a linear model to sort potential
startup opportunities based on variables representing the quality
of the team and the technology.
Leading universities, such as Princeton and Michigan, apply
probabilistic models that represent
applicants by grade point average, test scores, and other
variables to determine their likelihood of
graduating. Universities also use models to help students adopt
successful behaviors. Those models
use variables like changes in test scores over a semester. Disney
used an agent-based model to design
parks and attractions. That model created a computer rendition
of the park complete with visitors
and simulated their activity so that Disney could see how
different decisions might affect how the
3COPYRIGHT © 2018 HARVARD BUSINESS SCHOOL
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This document is authorized for educator review use only by
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[email protected] or 617.783.7860
https://www.basicbooks.com/titles/scott-e-page/the-model-
thinker/9780465094639/
https://propulsionenergy.aiaa.org/Model-basedDesign_PE2015/
park functioned. The Congressional Budget office uses an
economic model that includes income,
unemployment, and health statistics to estimate the costs of
changes to health care laws.
In these cases, the models organize the firehose of data. These
models all help leaders explain
phenomena and communicate information. They also impose
logical coherence, and in doing so, aid
in strategic decision making and forecasting. It should come as
no surprise that models are more
accurate as predictors than most people. In head-to-head
competitions between people who use
models and people who don’t, the former win, and typically do
so by large margins.
Models win because they possess capabilities that humans lack.
Models can embed and leverage
more data. Models can be tested, calibrated, and compared. And
models do not commit logical errors.
Models do not suffer from cognitive biases. (They can,
however, introduce or replicate human biases;
that is one of the reasons for combining multiple models.)
Combining multiple models
While applying one model is good, using many models — an
ensemble — is even better, particularly
in complex problem domains. Here’s why: models simplify. So,
no matter how much data a model
embeds, it will always miss some relevant variable or leave out
some interaction. Therefore, any
model will be wrong.
With an ensemble of models, you can make up for the gaps in
any one of the models. Constructing
the best ensemble of models requires thought and effort. As it
turns out, the most accurate
ensembles of models do not consist of the highest performing
individual models. You should not,
therefore, run a horse race among candidate models and choose
the four top finishers. Instead, you
want to combine diverse models.
For decades, Wall Street firms have used models to evaluate
investment risk. Risk takes many forms.
In addition to risk from financial market fluctuations, there
exist risks from geopolitics, climactic
events, and social movements, such as occupy Wall Street, not
to mention, risks from cyber threat
and other forms of terrorism. A standard risk model based on
stock price correlations will not embed
all of these dimensions. Hence, leading investment banks use
ensembles of models to assess risks.
But, what should that ensemble look like? Which models does
one include, and which does one
leave out?
The first guideline for building an ensemble is to look for
models that focus attention on different
parts of a problem or on different processes. By that I mean,
your second model should include
different variables. As mentioned above, models leave stuff out.
Standard financial market models
leave out fine-grained institutional details of how trades are
executed. They abstract away from the
ecology of beliefs and trading rules that generate price
sequences. Therefore, a good second model
would include those features.
4COPYRIGHT © 2018 HARVARD BUSINESS SCHOOL
PUBLISHING CORPORATION. ALL RIGHTS RESERVED.
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This document is authorized for educator review use only by
ABIRAMI DEVI SIVAKUMAR, Jubail University College until
Mar 2019. Copying or posting is an infringement of copyright.
[email protected] or 617.783.7860
https://propulsionenergy.aiaa.org/Model-basedDesign_PE2015/
https://www.amazon.com/Expert-Political-Judgment-Good-
Know/dp/0691128715
https://www.amazon.com/Diversity-Bonus-Knowledge-
Compelling-Interests/dp/0691176884
http://axon.cs.byu.edu/papers/gashler2008icmla.pdf
https://www.amazon.com/Political-Risk-Businesses-
Governments-Anticipate/dp/1549115545
https://www.mckinsey.it/idee/the-evolution-of-model-risk-
management
The mathematician Doyne Farmer advocates agent-based models
as a good second model. An agent-
based model consists of rule based “agents” that represent
people and organizations. The model is
then run on a computer. In the case of financial risk, agent-
based models can be designed to include
much of that micro-level detail. An agent-based model of a
housing market can represent each
household, assigning it an income and a mortgage or rental
payment. It can also include behavioral
rules that describe conditions when the home’s owners will
refinance and when they will declare
bankruptcy. Those behavioral rules may be difficult to get right,
and as a result, the agent-based
model may not be that accurate — at least at first. But, Farmer
and others would argue that over time,
the models could become very accurate.
We care less about whether agent-based models would
outperform other standard models than
whether agent-based models will read signals missed by
standard models. And they will. Standard
models work on aggregates, such as Case-Shiller indices, which
measure changes in prices of houses.
If the Case-Shiller index rises faster than income, a housing
bubble may be likely. As useful as the
index is, it is blind to distributional changes that hold means
constant. If income increases go only to
the top 1% while housing prices rise across the board, the index
would be no different than if income
increases were broad based. Agent based models would not be
blind to the distributional changes.
They would notice that people earning $40,000 must hold
$600,000 mortgages. The agent based
model is not necessarily better. It’s value comes from focusing
attention where the standard model
does not.
The second guideline borrows the concept of boosting, a
technique from machine learning.
Ensemble classification algorithms, such as random forest
models consist of a collection of simple
decision trees. A decision tree classifying potential venture
capital investments might say “if the
market is large, invest.” Random forests are a technique to
combine multiple decision trees. And
boosting improves the power of these algorithms by using data
to search for new trees in a novel way.
Rather than look for trees that predict with high accuracy in
isolation, boosting looks for trees that
perform well when the forest of current trees does not. In other
words, look for a model that attacks
the weaknesses of your current model.
Here’s one example. As mentioned, many venture capitalists use
weighted attribute models to sift
through the thousands of pitches that land at their doors.
Common attributes include the team, the
size of the market, the technological application, and timing. A
VC firm might score each of these
dimensions on a scale from 1 to 5 and then assign an aggregate
score as follows:
Score = 10*Team + 8*Market size + 7*Technology + 4*Timing
This might be the best model the VC can construct. The second
best model might use similar
variables and similar weights. If so, it will suffer from the same
flaws as the first model. That means
that combining it with the first model will probably not lead to
substantially better decisions.
5COPYRIGHT © 2018 HARVARD BUSINESS SCHOOL
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[email protected] or 617.783.7860
https://www.edge.org/conversation/j_doyne_farmer-collective-
awareness
https://econpapers.repec.org/article/blajfinan/v_3a64_3ay_3a20
09_3ai_3a1_3ap_3a75-115.htm
A boosting approach would take data from all past decisions and
see where the first model failed. For
instance, it may be that be that investment opportunities with
scores of 5 out of 5 on team, market
size, and technology, do not pan out as expected. This could be
because those markets are crowded.
Each of the three attributes —team, market size, and workable
technology — predicts well in
isolation, but if someone has all three, it may be likely that
others do as well and that a herd of horses
tramples the hoped for unicorn. The first model therefore would
predict poorly in these cases. The
idea of boosting is to go searching for models that do best
specifically when your other models fail.
To give a second example, several firms I have visited have
hired computer scientists to apply
techniques from artificial intelligence to identify past hiring
mistakes. This is boosting in its purest
form. Rather than try to use AI to simply beat their current
hiring model, they use AI to build a
second model that complements their current hiring model.
They look for where their current model
fails and build new models to complement it.
In that way, boosting and attention share something in common:
they both look to combine
complementary models. But attention looks at what goes into
the model — the types of variables it
considers — whereas boosting focuses on what comes out — the
cases where the first model
struggles.
Boosting works best if you have lots of historical data on how
your primary model performs.
Sometimes, we don’t. In those cases, seek conflict. That is, look
for models that disagree. When a
team of people confronts a complex decision, it expects — in
fact it wants — some disagreement.
Unanimity would be a sign of group think. That’s true of models
as well.
The only way the ensemble can improve on a single model is if
the models differ. To borrow a quote
from Richard Levins, the “truth lies at the intersection of
independent lies.” It does not lie at the
intersection of correlated lies. Put differently, just as you would
not surround yourself with “yes
men” do not surround yourself with “yes models.”
Suppose that you run a pharmaceutical company and that you
use a linear model to projects sales of
recently patented drugs. To build an ensemble, you might also
construct a systems dynamics model
as well as a contagion model. Say that the contagion model
results in similar long-terms sales but a
slower initial uptake, but that the systems dynamics model leads
to a much different forecast. If so, it
creates an opportunity for strategic thinking. Why do the
models differ? What can we learn from that
and how do we intervene.
In sum, models, like humans, make mistakes because they fail
to pay attention to relevant variables
or interactions. Many-model thinking overcomes the failures of
attention of any one model. It will
make you wise.
6COPYRIGHT © 2018 HARVARD BUSINESS SCHOOL
PUBLISHING CORPORATION. ALL RIGHTS RESERVED.
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This document is authorized for educator review use only by
ABIRAMI DEVI SIVAKUMAR, Jubail University College until
Mar 2019. Copying or posting is an infringement of copyright.
[email protected] or 617.783.7860
https://scholar.harvard.edu/files/xgabaix/files/behavioral_inatte
ntion.pdf
https://scholar.harvard.edu/files/xgabaix/files/behavioral_inatte
ntion.pdf
Scott E. Page is the Leonid Hurwicz Collegiate Professor of
Complex Systems, Political Science, and Economics at the
University of Michigan and an external faculty member of the
Santa Fe Institute. He is the author of The Model Thinker
(Basic Books, 2018).
7COPYRIGHT © 2018 HARVARD BUSINESS SCHOOL
PUBLISHING CORPORATION. ALL RIGHTS RESERVED.
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This document is authorized for educator review use only by
ABIRAMI DEVI SIVAKUMAR, Jubail University College until
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[email protected] or 617.783.7860
https://www.basicbooks.com/titles/scott-e-page/the-model-
thinker/9780465094639/

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Compare and Contrast Between Duty Ethics and Divine Command Du

  • 1. Compare and Contrast Between Duty Ethics and Divine Command Duty Ethics is the ethical theory that was began with the teaching of Immanuel Kant, who was a German philosopher that lived from 1724 to 1804. He believed that a sense of duty should be the main concept of a person’s beliefs. Basically, Kant believed that a person should be guided by principles that they would like everyone else to live by.1 In the theory of duty ethics, a person is to act in a certain way, because it is the correct way to act. Duty ethics define the good as treating others in a respectful humane manner, since that is how you would want to be treated. A weakness of the Duty Ethics theory is that not every person has the same understanding or belief of what is right or wrong. Divine Command is that ethical theory that believes what is good is good because it was commanded by God.2 As it explains in a conversation someone had with Jesus, in Matthew 19:17. “Why do you ask me about what is good? He said to him. “There is only one who is good. If you want to enter life, keep the commandments.”3 This theory teaches that people cannot live a moral life, unless they follow the moral teachings of God.4 A weakness that I think the Divine Command theory has is that if a person is not a believer, why would they follow the instructions of the deity giving the commands? When God created humankind, He gave us the freedom of choice. With this choice He also instilled in us the basic understanding of what is morally right or wrong. Both theories teach us to do what is right, to treat other people, how we would want to be treated, with kindness and respect. Duty Ethics Theory teaches us to do the right thing no matter what the outcome is. Divine Command Theory teaches to what is right because it is what God commanded. Another difference is where Duty Ethics can
  • 2. change with the morals of society, Divine Command does not change because God’s commands do not change. The Divine Command Theory is a stronger ethical theory than Duty Ethics Theory. It is the stronger theory, because it teaches people to follow the commandments of God and the teachings of the Bible. When a person follows the teaches of God and the bible, they will have a stronger understanding of what is morally right and wrong. With this understand they will make better ethical choices and decisions. Through these teachings we know that it is not right to cheat, steal, or commit murder, et cetera. The commandments and the instructions of God and the Bible are not open to change and cannot be change in order to fit the circumstances. When a person follows these commandments, they can live a life that is both morally ethical and pleasing to God. REPRINT H04NSZ PUBLISHED ON HBR.ORG NOVEMBER 19, 2018 ARTICLE DECISION MAKING Why “Many-Model Thinkers” Make Better Decisions by Scott E. Page D o N ot
  • 3. C op y or P os t This document is authorized for educator review use only by ABIRAMI DEVI SIVAKUMAR, Jubail University College until Mar 2019. Copying or posting is an infringement of copyright. [email protected] or 617.783.7860 DECISION MAKING Why “Many-Model Thinkers” Make Better Decisions by Scott E. Page NOVEMBER 19, 2018 “To be wise you must arrange your experiences on a lattice of models.” — Charlie Munger Organizations are awash in data — from geocoded transactional data to real-time website traffic to semantic quantifications of corporate annual reports. All these data and data sources only add value
  • 4. 2COPYRIGHT © 2018 HARVARD BUSINESS SCHOOL PUBLISHING CORPORATION. ALL RIGHTS RESERVED. D o N ot C op y or P os t This document is authorized for educator review use only by ABIRAMI DEVI SIVAKUMAR, Jubail University College until Mar 2019. Copying or posting is an infringement of copyright. [email protected] or 617.783.7860 if put to use. And that typically means that the data is incorporated into a model. By a model, I mean a formal mathematical representation that can be applied to or calibrated to fit data. Some organizations use models without knowing it. For example, a yield curve, which compares bonds with the same risk profile but different maturity dates, can be considered a model. A hiring
  • 5. rubric is also a kind of model. When you write down the features that make a job candidate worth hiring, you’re creating a model that takes data about the candidate and turns it into a recommendation about whether or not to hire that person. Other organizations develop sophisticated models. Some of those models are structural and meant to capture reality. Other models mine data using tools from machine learning and artificial intelligence. The most sophisticated organizations — from Alphabet to Berkshire Hathaway to the CIA — all use models. In fact, they do something even better: they use many models in combination. Without models, making sense of data is hard. Data helps describe reality, albeit imperfectly. On its own, though, data can’t recommend one decision over another. If you notice that your best- performing teams are also your most diverse, that may be interesting. But to turn that data point into insight, you need to plug it into some model of the world — for instance, you may hypothesize that having a greater variety of perspectives on a team leads to better decision-making. Your hypothesis represents a model of the world. Though single models can perform well, ensembles of models work even better. That is why the best thinkers, the most accurate predictors, and the most effective design teams use ensembles of models. They are what I call, many-model thinkers. In this article, I explain why many models are better than one and also describe three rules for how to construct your own powerful ensemble of models: spread
  • 6. attention broadly, boost predictions, and seek conflict. The case for models First, some background on models. A model formally represents some domain or process, often using variables and mathematical formula. (In practice, many people construct more informal models in their head, or in writing, but formalizing your models is often a helpful way of clarifying them and making them more useful.) For example, Point Nine Capital uses a linear model to sort potential startup opportunities based on variables representing the quality of the team and the technology. Leading universities, such as Princeton and Michigan, apply probabilistic models that represent applicants by grade point average, test scores, and other variables to determine their likelihood of graduating. Universities also use models to help students adopt successful behaviors. Those models use variables like changes in test scores over a semester. Disney used an agent-based model to design parks and attractions. That model created a computer rendition of the park complete with visitors and simulated their activity so that Disney could see how different decisions might affect how the 3COPYRIGHT © 2018 HARVARD BUSINESS SCHOOL PUBLISHING CORPORATION. ALL RIGHTS RESERVED. D o N ot
  • 7. C op y or P os t This document is authorized for educator review use only by ABIRAMI DEVI SIVAKUMAR, Jubail University College until Mar 2019. Copying or posting is an infringement of copyright. [email protected] or 617.783.7860 https://www.basicbooks.com/titles/scott-e-page/the-model- thinker/9780465094639/ https://propulsionenergy.aiaa.org/Model-basedDesign_PE2015/ park functioned. The Congressional Budget office uses an economic model that includes income, unemployment, and health statistics to estimate the costs of changes to health care laws. In these cases, the models organize the firehose of data. These models all help leaders explain phenomena and communicate information. They also impose logical coherence, and in doing so, aid in strategic decision making and forecasting. It should come as no surprise that models are more accurate as predictors than most people. In head-to-head competitions between people who use models and people who don’t, the former win, and typically do
  • 8. so by large margins. Models win because they possess capabilities that humans lack. Models can embed and leverage more data. Models can be tested, calibrated, and compared. And models do not commit logical errors. Models do not suffer from cognitive biases. (They can, however, introduce or replicate human biases; that is one of the reasons for combining multiple models.) Combining multiple models While applying one model is good, using many models — an ensemble — is even better, particularly in complex problem domains. Here’s why: models simplify. So, no matter how much data a model embeds, it will always miss some relevant variable or leave out some interaction. Therefore, any model will be wrong. With an ensemble of models, you can make up for the gaps in any one of the models. Constructing the best ensemble of models requires thought and effort. As it turns out, the most accurate ensembles of models do not consist of the highest performing individual models. You should not, therefore, run a horse race among candidate models and choose the four top finishers. Instead, you want to combine diverse models. For decades, Wall Street firms have used models to evaluate investment risk. Risk takes many forms. In addition to risk from financial market fluctuations, there exist risks from geopolitics, climactic events, and social movements, such as occupy Wall Street, not to mention, risks from cyber threat
  • 9. and other forms of terrorism. A standard risk model based on stock price correlations will not embed all of these dimensions. Hence, leading investment banks use ensembles of models to assess risks. But, what should that ensemble look like? Which models does one include, and which does one leave out? The first guideline for building an ensemble is to look for models that focus attention on different parts of a problem or on different processes. By that I mean, your second model should include different variables. As mentioned above, models leave stuff out. Standard financial market models leave out fine-grained institutional details of how trades are executed. They abstract away from the ecology of beliefs and trading rules that generate price sequences. Therefore, a good second model would include those features. 4COPYRIGHT © 2018 HARVARD BUSINESS SCHOOL PUBLISHING CORPORATION. ALL RIGHTS RESERVED. D o N ot C op y or
  • 10. P os t This document is authorized for educator review use only by ABIRAMI DEVI SIVAKUMAR, Jubail University College until Mar 2019. Copying or posting is an infringement of copyright. [email protected] or 617.783.7860 https://propulsionenergy.aiaa.org/Model-basedDesign_PE2015/ https://www.amazon.com/Expert-Political-Judgment-Good- Know/dp/0691128715 https://www.amazon.com/Diversity-Bonus-Knowledge- Compelling-Interests/dp/0691176884 http://axon.cs.byu.edu/papers/gashler2008icmla.pdf https://www.amazon.com/Political-Risk-Businesses- Governments-Anticipate/dp/1549115545 https://www.mckinsey.it/idee/the-evolution-of-model-risk- management The mathematician Doyne Farmer advocates agent-based models as a good second model. An agent- based model consists of rule based “agents” that represent people and organizations. The model is then run on a computer. In the case of financial risk, agent- based models can be designed to include much of that micro-level detail. An agent-based model of a housing market can represent each household, assigning it an income and a mortgage or rental payment. It can also include behavioral rules that describe conditions when the home’s owners will refinance and when they will declare bankruptcy. Those behavioral rules may be difficult to get right, and as a result, the agent-based
  • 11. model may not be that accurate — at least at first. But, Farmer and others would argue that over time, the models could become very accurate. We care less about whether agent-based models would outperform other standard models than whether agent-based models will read signals missed by standard models. And they will. Standard models work on aggregates, such as Case-Shiller indices, which measure changes in prices of houses. If the Case-Shiller index rises faster than income, a housing bubble may be likely. As useful as the index is, it is blind to distributional changes that hold means constant. If income increases go only to the top 1% while housing prices rise across the board, the index would be no different than if income increases were broad based. Agent based models would not be blind to the distributional changes. They would notice that people earning $40,000 must hold $600,000 mortgages. The agent based model is not necessarily better. It’s value comes from focusing attention where the standard model does not. The second guideline borrows the concept of boosting, a technique from machine learning. Ensemble classification algorithms, such as random forest models consist of a collection of simple decision trees. A decision tree classifying potential venture capital investments might say “if the market is large, invest.” Random forests are a technique to combine multiple decision trees. And boosting improves the power of these algorithms by using data to search for new trees in a novel way. Rather than look for trees that predict with high accuracy in isolation, boosting looks for trees that
  • 12. perform well when the forest of current trees does not. In other words, look for a model that attacks the weaknesses of your current model. Here’s one example. As mentioned, many venture capitalists use weighted attribute models to sift through the thousands of pitches that land at their doors. Common attributes include the team, the size of the market, the technological application, and timing. A VC firm might score each of these dimensions on a scale from 1 to 5 and then assign an aggregate score as follows: Score = 10*Team + 8*Market size + 7*Technology + 4*Timing This might be the best model the VC can construct. The second best model might use similar variables and similar weights. If so, it will suffer from the same flaws as the first model. That means that combining it with the first model will probably not lead to substantially better decisions. 5COPYRIGHT © 2018 HARVARD BUSINESS SCHOOL PUBLISHING CORPORATION. ALL RIGHTS RESERVED. D o N ot C op y or
  • 13. P os t This document is authorized for educator review use only by ABIRAMI DEVI SIVAKUMAR, Jubail University College until Mar 2019. Copying or posting is an infringement of copyright. [email protected] or 617.783.7860 https://www.edge.org/conversation/j_doyne_farmer-collective- awareness https://econpapers.repec.org/article/blajfinan/v_3a64_3ay_3a20 09_3ai_3a1_3ap_3a75-115.htm A boosting approach would take data from all past decisions and see where the first model failed. For instance, it may be that be that investment opportunities with scores of 5 out of 5 on team, market size, and technology, do not pan out as expected. This could be because those markets are crowded. Each of the three attributes —team, market size, and workable technology — predicts well in isolation, but if someone has all three, it may be likely that others do as well and that a herd of horses tramples the hoped for unicorn. The first model therefore would predict poorly in these cases. The idea of boosting is to go searching for models that do best specifically when your other models fail. To give a second example, several firms I have visited have hired computer scientists to apply techniques from artificial intelligence to identify past hiring mistakes. This is boosting in its purest
  • 14. form. Rather than try to use AI to simply beat their current hiring model, they use AI to build a second model that complements their current hiring model. They look for where their current model fails and build new models to complement it. In that way, boosting and attention share something in common: they both look to combine complementary models. But attention looks at what goes into the model — the types of variables it considers — whereas boosting focuses on what comes out — the cases where the first model struggles. Boosting works best if you have lots of historical data on how your primary model performs. Sometimes, we don’t. In those cases, seek conflict. That is, look for models that disagree. When a team of people confronts a complex decision, it expects — in fact it wants — some disagreement. Unanimity would be a sign of group think. That’s true of models as well. The only way the ensemble can improve on a single model is if the models differ. To borrow a quote from Richard Levins, the “truth lies at the intersection of independent lies.” It does not lie at the intersection of correlated lies. Put differently, just as you would not surround yourself with “yes men” do not surround yourself with “yes models.” Suppose that you run a pharmaceutical company and that you use a linear model to projects sales of recently patented drugs. To build an ensemble, you might also construct a systems dynamics model as well as a contagion model. Say that the contagion model
  • 15. results in similar long-terms sales but a slower initial uptake, but that the systems dynamics model leads to a much different forecast. If so, it creates an opportunity for strategic thinking. Why do the models differ? What can we learn from that and how do we intervene. In sum, models, like humans, make mistakes because they fail to pay attention to relevant variables or interactions. Many-model thinking overcomes the failures of attention of any one model. It will make you wise. 6COPYRIGHT © 2018 HARVARD BUSINESS SCHOOL PUBLISHING CORPORATION. ALL RIGHTS RESERVED. D o N ot C op y or P os t This document is authorized for educator review use only by ABIRAMI DEVI SIVAKUMAR, Jubail University College until Mar 2019. Copying or posting is an infringement of copyright.
  • 16. [email protected] or 617.783.7860 https://scholar.harvard.edu/files/xgabaix/files/behavioral_inatte ntion.pdf https://scholar.harvard.edu/files/xgabaix/files/behavioral_inatte ntion.pdf Scott E. Page is the Leonid Hurwicz Collegiate Professor of Complex Systems, Political Science, and Economics at the University of Michigan and an external faculty member of the Santa Fe Institute. He is the author of The Model Thinker (Basic Books, 2018). 7COPYRIGHT © 2018 HARVARD BUSINESS SCHOOL PUBLISHING CORPORATION. ALL RIGHTS RESERVED. D o N ot C op y or P os t This document is authorized for educator review use only by ABIRAMI DEVI SIVAKUMAR, Jubail University College until
  • 17. Mar 2019. Copying or posting is an infringement of copyright. [email protected] or 617.783.7860 https://www.basicbooks.com/titles/scott-e-page/the-model- thinker/9780465094639/