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Quote to remember

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People love models, especially when they’re big, complex and quantitative. Models make us feel safe. They take the uncertainty of the future and break it down into neat, bite-sized equations. But here’s the problem with models, which is really a problem with the human mind. We become so focused on the predictions of the model – be it the cod population, or the risk of mortgage derivatives – that we stop questioning the basic assumptions of the model. (Instead, the confirmation bias seeps in and we devote way too much mental energy to proving the model true.) It’s not just about black swans or random outliers. After all, there was no black swan event that triggered this most recent financial mess. There was simply an exquisite model, churning out extremely profitable predictions, that happened to be based on a false premise.
- Jonah Lehrer in Dangerous Models

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