19 June, 2012

The Walking Intelligentsia

Just today, I’ve started reading Nassim Nicholas Taleb’s The Black Swan – The Impact of the Highly Improbable. The first 60 pages have been a good, yet a quite unsurprising read. This not a negative comment as such – I genuinely find the book well written - it’s just the content isn’t that new to me.

An interesting statement, however, caught my eye in the fifth chapter, where Taleb writes
This argument [--] was rediscovered by my friend the (thinking) mathematician Bruno Dupire during one of our intense meditating walks in London – on of those intense walk-discussions [--]

What’s interesting about this is that in another book by another author, I also had the pleasure of reading about the author’s pleasingly meditative intellectual walks. Now, I have to ask: Are these walks really something people in actual, real life engage in, or are they just token encounters meant to signal that the revered author is part of the intelligentsia?

Somehow the idea of a meditative walk just doesn’t figure in the picture of modern life with ringing alarms, phones and meetings. I wish it did – and that’s exactly the reason for my suspicion. I have never encountered a group of people on an intense walk during daytime. It’s more often a single individual, hurriedly making his way to a car, with phone in one hand and papers in another. The only intense part of his appearance is the frown on his face.

Well, you never know – maybe intelligence just correlates with walking in a very strong fashion.

18 May, 2012

The Importance of Validity

About three weeks ago I got into an argument about the scientific validity and pragmatic usefulness of MBTI. It suffices, for the purposes of this post, to just say that MBTI is a psychological personality test. Even though I have strong opinions about the measure itself, MBTI is not the issue here.

What is the issue is the relationship of scientific validity and practical usefulness of a concept or theory? Is there a correlation? To me it seems obvious there’s at least some correlation, but how much? And how much does it matter? What are valid theories better at – if anything? And can an invalid theory have practical uses? These are the kinds of questions that the debate highlighted for me. And since nowadays science seems to pop up everywhere, the importance of such questions should be as high as ever – or higher.

To start off, the first step should be scientific validity itself. What do we mean by that? Of course, this simple question in itself has been the subject of a raging debate for centuries. The likes of Popper, Kuhn etc. have all offered their take on the issue. Unfortunately space constraints prevent from discussing those points, and all I can do is offer my very humble opinion. As I see it, scientific method is just a method of questioning and testing taken to the extreme. What scientific validity means for me is that in the defined frame of reference, a theory gives more often than not the same results given the same circumstances. Frame of reference is an important limiting factor, as theories usually have a very limited scope. It makes no sense to have a quantum theory of the human mind, since the unit of analysis in the mind is not the quark, nor will it in the foreseeable future to be so (complexity is a limiting factor here). A theory that works in every situation is either wrong or computationally too demanding. For that reason, we must allow for a little laxity in accuracy. It would be foolish to allow no inaccuracies or mistakes, since then we would have to severely constrain the meaning of the term “science”. Very general or vague statements aside, no theories would be left after the Armageddon of mistake-cleansing.

Next step: why is validity important? Simply put, it seems to promise a lot in the way of consistency. A valid theory outputs the same results in the same situation. Therefore, a valid theory outputs either truths or falsities (in the majority of cases). An invalid theory, however, produces whatever results it happens to produce – there are only weak correlations with the parameters of the situation. How can we know, then, whether the output is true or false?

If validity were a binary variable this questioning would hardly be worth a post. Unfortunately, validity is a continuum. There’s no clear line between validity and its counterpart. It’s more a case of two distinct polar opposites – and a huge swathe of grey area in between. What to say of those theories and their validity?

The answer, it seems to me, hinges on what we can gain and lose from accepting a theory. Assuming it is valid – though not yet proven so – what are the gains? And in the opposite situation – if the theory turns out to be false – what are the losses? And here the title comes into play: it’s an issue about the economy of concepts.

If the single grey-area theory is all we have, the situation is the following: we are lost in the wild, and we have but a single map. We have never seen the map before, and have no idea whether it is accurate or not – or if it portrays the area we’re lost in. The question being – is an unfamiliar map better than no map at all? To this question, I believe, the answer is to take the map. After all, going without a map is a random walk, and unlikely to be successful. Even the crudest of maps, however, had something right. Some information trumps lack of it, even though we may follow the wrong path. But eventually, the map will lead us somewhere, and if we’re willing to update on the information – redraw the map – we’ll be better off than starting from nothing.

However, in the modern society there rarely is just one map. There are more often than not several competing theories which to choose from. In this situation we ought to choose the best map. And that is a question of validity (also of accuracy & reliability, but let’s combine all those academic terms into ‘validity’ for now). It is simply inefficient to choose the less valid theory. That will only result in fewer correct predictions – and if unlucky, more of really, really false ones(like phlogiston or elan vital). That is a risk I’m not willing to accept. In the world of theories, a tested case is better than a new bag of tricks.

This whole discussion leaves non-theories, like thought experiments aside. This is deliberate. The space just won’t allow for that side. But I’ll be following that lead shortly, I hope.

03 May, 2012

Back from the Hole

Whew. It’s been an interesting, yet a pretty awful, few weeks. I’ve been totally swamped with two very large assignments, worth of 9 credits in total, and both made for companies. The other one went really well, I think – the other one not so, to make a huge understatement. I got to analyze some statistics and do some VBA programming to simulate the operation of the company logistics in the Helsinki region. Some serious data crunching meant I spent 42 hours doing just one assignment last week, not to mention an essay and job-related stuff on top. Awful, to say the least.

On the other hand, it was in a perverse way very much fun to really concentrate on one issue so fully, and to really give it all we got. But still, I have to admit 60 hour work weeks really aren’t my cup of tea.
All that behind me, the upcoming months are looking a lot more interesting. Reading for the entrance exams are back in the picture. Oddly enough, I still enjoy Frege, Hilbert & co. very much, with only three weeks to go. Maybe it is actually interesting, although a friend of mine remarked “you just haven’t been reading enough yet”. Well, we’ll see if that changes.

Another inspirational thing has been my first major course: Advanced Course in Leadership. I’ve got to write some interesting stuff about philosophy of science regarding leadership and enjoyed it immensely. The only drawback being that the number of articles to read weekly has pretty much doubled because of the course.

Oh, and a half marathon is coming up in two days. The aim is to break my record (and first result ever on the 21,1 km), meaning I’m aiming under 1.22.38. We’ll see how that turns out. All the assignments and Vappu hit pretty much at the worst possible moment from the race point of view, but still I’m semi-confident. It’s psychologically a very important race for the autumn marathon.

20 March, 2012

How Not to Pay Your Debts

An article by Amar et al [1]. showed how irrational people can be when it comes to paying one’s debts. The experiment setting (or one of them) was simple enough:

You have a two debts with different balances and different interest rates. You need to make a decision how do distribute a given amount of cash to pay back some of those debts. 

For example, let’s suppose you have these two debts:
Debt A: Balance 100 €               interest rate 5 %
Debt B: Balance 1000 €             interest rate 10 %

You get 100 € of cash. How do you allocate the money to paying back those debts (assuming you must spend all of it on paying back the debts)?

How would you?

[scroll down for result]

Suprisingly enough, the experiment shows that 29 % of people actually used the 100 € to pay back debt A! Mathematically, this obviously makes no sense. People should pay back debt B. Let’s look at the numbers:

Pay back A
Pay back 100 € of B
Debt Amount left Accrued interest
Debt Amount left Accrued interest
A 0 € 0 €
A 100 € 5 €
B 1 000 € 100 €
B 900 € 90 €
total 1 000 € 100 €

1 000 € 95 €

So here’s yet another example of how we manage to be very irrational even in cases where the numbers are concrete and easy to calculate. But, thankfully this is one of those problems that can be solved: according to the study, whereas a significant majority of normal consumers paid debts in the above situation unoptimally, only 21 % of financial professionals made the same error. They had learnt to obey the heuristic rule “always pay back the debt with the highest interest rate”.

Amar, Moty, Dan Ariely, Shahar Ayal, Cynthia E Cryder, and Scott I Rick. “Winning the Battle but Losing the War: The Psychology of Debt Management.” Journal of Marketing Research (JMR) 48: S38–S50.