Jason Collins discusses the issue.
the reluctance to have our decisions and actions replaced by automated systems extends through a range of human activity and decision-making. It took nearly 50 years for people to accept automated lifts. Today, over three quarters of Americans are afraid to ride in a self-driving vehicle.
Automated systems tend to increase efficiency but at a cost of fragility. When algorithms are first introduced to a domain, humans are better at spotting circumstances that were unanticipated by the algorithm.
Amar Bhide, in A Call for Judgment, argues that the financial crisis in part reflects the fragility of a regulatory system (including internal regulations at financial institutions) that relied too much on formulas and too little on judgment.
But Collins points out that there are many situations in which humans over-ride algorithms in a harmful way. The challenge is to enable humans to distinguish situations in which the algorithm is making better calculations from situations in which the algorithm is missing something that the human sees.
Autonomous cars will eventually become common and mundane and normal people will treat them as such. But for now, they are new and foreign, and it’s quite normal for people to have apprehension as well as excitement about that.
Computer algorithms are the least of my concerns. Dealing with child in school these days, one is faced with an endless stream of bureaucratic algorithms. Principals hardly ever need to think, some thing happens, do this, same with teachers. That is not even a government school for my child. Judgement has died, no one wants that responsibility. I will add that my main complaint on this, involves a girl that probably liked my son continuously poking him, and the principal seeking to sound in command, assured me the school “has a zero tolerance” policy on issues like this. My response that I hoped she would use her judgement, threw her for a loop.
Well how many people are afraid of flying? When was there a major commercial airline in the United States? I think 2009. That is bizarrely safe and yet how many people are afraid to fly and even in my case, it still quickly crosses my mind of crash on a flight.
At this point 3/4 of Americans afraid of autonomous cars is meaning less because they have not experienced one. Over the next several generation it will fall but there will be a reasonable percentage of afraid of self-driving cars because humans are not in charge.
A Call for Judgment, argues that the financial crisis in part reflects the fragility of a regulatory system (including internal regulations at financial institutions)
IMO the worst mistake in the post-crisis is how little we are blaming the internal regulations of financial institutions. These are banks and they have a risk department that they started ignoring in 2002 and I bet it was the bank corporate leadership that were ignoring their risk models not that the necessarily the risk models were originally wrong. Or the bank leadership was over-stacking the risk models to show their desired result.
Not quite over-stacking the risk model, merely simplifying too much.
There was no modelling done for a 10% market wide decrease in home value PLUS the expected market effects of such a decline.
And the better (optimal?) solution was to let the Big Banks fail, with the Fed supporting smaller, safer, more prudent banks with low-cost loans and the ability to replace the services provided by the Big & too risky Banks. Even if 32 of the top 50 financial institutions go belly up, it wouldn’t hurt Main Street so much.
But Collins points out that there are many situations in which humans over-ride algorithms in a harmful way. The challenge is to enable humans to distinguish situations in which the algorithm is making better calculations from situations in which the algorithm is missing something that the human sees.
I’m sensing an infinite regress here.
I’m a business owner, and I take my risk regulations very seriously because if we have a real incident, I could literally lose everything I’ve worked to build up. I know no government body will care in the least if I run into troubles, in fact, they very well might pile on if I did.
All I ask is that people in decision-making capacities at institutions whose success or failure can influence the macroeconomy face a similar incentive structure.