Tuesday, November 10, 2009

Flaw of Averages recap and INFORMS podcast

I talked about an article about Sam Savage and his new book the Flaw of Averages not too long ago. This past Friday INFORMS released a new podcast in their series the Science of Better interviewing Sam Savage. This is a fascinating interview about the theory in his book and the, unfortunate often, over simplification of decision analysis based on a simple average of a data population. I strongly suggest listening to this podcast as Sam has a unique way of presenting his theories.


Anonymous said...

I didn't like the podcast at all.

Prof. Savage had 23 minutes to give on good example of what he means by the "flaw of averages" and gave none.

He seems to be thinking more about making money than proposing a valid theory:
- "I thought this was a great title for the book"... and he had no book written yet
- "I immediately went to register mindle.com"

Really disappointing.

Best regards

Larry said...

Actually I have to disagree. I think he had a great example using personal financial planning. The flaw of average example he used was to estimate yearly growth of the market in terms of a single average percentage. He offered that Monte Carlo simulation would be a better tool to use to predict future market possibilities and interactions.