Mathematician Says Big Data Is Causing a ‘Silent Financial Crisis’ • Hacker News Board

Re: Mathematician Says Big Data Is Causing a ‘Silent Financial Crisis’

#101

Post by yummyfajitas » Tue, Aug 30, 2016, 5:03 PM UTC

dragonwriter wrote: post #100

yummyfajitas wrote: post #97

Earlier quoted context omitted.

True, a model which predicts reality will in fact predict reality. I've never seen any evidence that your hypothesis is true, or even a model that would account for it, but I'm hardly an expert in the field. Assuming this is more than speculation/theoretical nitpicking, do you have citations on the effects you describe? If your theory is more than just idle speculation, this is a great way for non-racists to engage i…

> I've never seen any evidence that your hypothesis is true If the key element of it wasn't true at one point, blockbusting would never have been a viable strategy. If you want to present arguments that race relations have changed in enough since then that whites no longer prefer living without blacks in the immediate vincinity so that such neighborhoods command a price premium and diversity causes price declines, I'…

Blockbusting does not have to be caused by white people being non-neutral towards blacks. It can also be caused by white people, perhaps accurately, believing that the neighborhood will change in other undesirable ways (e.g. higher crime).

Similarly, while I'm well aware of (and have practiced in the past) living in black neighborhoods to save money, it was not obviously a racial-arbitrage strategy. The neighborhoods I lived in were undesirable and cheap for a variety of reasons (reduced amenities, higher crime), and it's far from clear how much of a racial delta there was. I don't have any reason to believe that a low amenity, high crime, entirely white neighborhood would have had a different price.

I always viewed it as a crime arbitrage strategy; being 6'6", somewhat muscular and wearing shoes with holes in them, I don't view myself as much of a crime target.

So yes, I'd like to see evidence of either a) whites being non-neutral towards blacks in the statistical algorithms era (e.g. 1995+) and b) a statistical default or prepayment model that incorporates network effects of this sort (or anything mathematically similar).

And incidentally, I'm asking about the networking model because it sounds super interesting. Insofar as network models are reliable enough to use in lending, I'd love to know about it. This would directly affect some of my work if I could port such models into the tech space.

Re: Mathematician Says Big Data Is Causing a ‘Silent Financial Crisis’

#102

Post by thaw13579 » Tue, Aug 30, 2016, 5:30 PM UTC

yummyfajitas wrote: post #54

muraiki wrote: post #49

Earlier quoted context omitted.

I did not make a blanket statement that all ML algos are racist against Asians. My point was to convey that if the training data do not accurately represent the population, the algorithm will carry the biases of that inaccurate representation: the algorithm is only as good as the data it is trained upon (for supervised learning). As a sibling comment stated, humans are deeply involved in all aspects of designing and…

I did not make a blanket statement that all ML algos are racist against Asians. My point was to convey that if the training data do not accurately represent the population, the algorithm will carry the biases of that inaccurate representation: the algorithm is only as good as the data it is trained upon (for supervised learning). But that's not true. Inadequate training data will cause variance , not bias . This vari…

Thanks for the interesting article. Although, from my reading, it seems to support the importance of both data handling and statistics in avoiding bias. That is, a bias in the dataset (or which subset is analyzed) would subsequently bias the statistical results (Box 1 and 2).

Regarding big data and ML, I guess the question is then what kind of biases exist in data collection, something that seems dependent on the details and history each particular dataset.

Re: Mathematician Says Big Data Is Causing a ‘Silent Financial Crisis’

#103

Post by anoplus » Tue, Aug 30, 2016, 6:58 PM UTC

chendies wrote: post #78

anoplus wrote: post #74

Big data has the potential to create either unprecedented equality or inequality. Transparency is a key word in this post (I often Ctrl+F to see how many matches for "transparen" I see in this type of posts). When it comes to software, one policy to make things more transparent is open-sourcing. The question is opening what and to what degree. I feel strongly that organizations today could and should be much more ope…

Transparency of pricing models does not immediately result in better outcomes for consumers. In some cases, it may actually result in worse outcomes. Consider when there are few companies within an industry, like rare metal mining. If they chose to use the same, open-source pricing model, and any changes to that pricing model would be reflected by all companies, the optimal pricing model would be to price at the mono…

It's true openness isn't free of side effects. I think a mining company that has exclusive possession over a public resource should be rewarded with the value creation (mining) and not by possession (natural resources). A government should designate the natural resources to public welfare and is ultimately achieved by openness. A resource greedy mining company would rather dispense with transparency in this case.

Regarding the borrower problem. This is a common fear of revealing one weaknesses by openness. I believe society will invent new alternatives to support the new needs. Again, it seems openness is positive overall, despite new challenges it presents.

Re: Mathematician Says Big Data Is Causing a ‘Silent Financial Crisis’

#104

Post by tboyd47 » Tue, Aug 30, 2016, 7:27 PM UTC

Just like programs only know to do what they're coded to do, algorithms only learn what's already in their dataset. It's up to data scientists and analysts to scrub their dataset of potentially discriminatory data. If you're contractually obligated to do otherwise, you should either find another job or do the right thing anyway. If you choose the latter and someone takes action against you, then you should take it to court.

I was in a situation like this in my own work and I regret not standing up for the right thing now...

Re: Mathematician Says Big Data Is Causing a ‘Silent Financial Crisis’

#105

Post by Sniffnoy » Tue, Aug 30, 2016, 7:28 PM UTC

ThePhysicist wrote: post #12

There is a lot of interesting research on the societal impact and the (potential) problems caused by the use of large-scale data analysis and artificial intelligence, e.g. by Kate Crawford at MSFT Research. Last year I gave a talk on this at 32C3 where I tried to elucidate some of the problems that can pop up when using data analysis to automate things that were previously done by humans: https://www.youtube.com/watc…

The ethics being discussed here, though, are, well... not obvious. Political, really. Are you going to be able to get serious agreement about what the correct decisions are in cases like these? By actual argument, and not by shouting down one's opponents?

Re: Mathematician Says Big Data Is Causing a ‘Silent Financial Crisis’

#106

Post by [deleted] » Wed, Aug 31, 2016, 4:49 AM UTC

IncRnd wrote: post #85

ramblenode wrote: post #76

An interesting point touched on in the article is the extent to which feedback from a predictive algorithm contributes to its later predictions being biased. If police are targeting a specific neighborhood because it is flagged as being a high crime area, then there is likely to be a higher arrest rate for innocent people too, i.e. a higher false positive rate. Unless there is a good way of differentiating false and…

One could legitimately say that learning of patterns is the process of bias creation.

[deleted]

Re: Mathematician Says Big Data Is Causing a ‘Silent Financial Crisis’

#107

Post by throwwit » Wed, Aug 31, 2016, 12:27 PM UTC

visarga wrote: post #79

ramblenode wrote: post #76

An interesting point touched on in the article is the extent to which feedback from a predictive algorithm contributes to its later predictions being biased. If police are targeting a specific neighborhood because it is flagged as being a high crime area, then there is likely to be a higher arrest rate for innocent people too, i.e. a higher false positive rate. Unless there is a good way of differentiating false and…

> If police are targeting a specific neighborhood because it is flagged as being a high crime area, then there is likely to be a higher arrest rate for innocent people Police officers could be employed to periodically monitor a sample of the AI outputs and rate them. Humans can still be in the loop, just not at the lowest level of the loop. I'd have much more confidence in an AI that passes the tests and is independe…

I'd expect diffusion of responsibility or just plain laziness to happen with a human in the loop. (Side note: This thread is talking about 'broken window' policy.)

Re: Mathematician Says Big Data Is Causing a ‘Silent Financial Crisis’

#108

Post by PeterisP » Wed, Aug 31, 2016, 4:51 PM UTC

scatters wrote: post #73

marcosdumay wrote: post #27

Earlier quoted context omitted.

Do you have any counter anecdote to the assertion? Because nobody will make a study to verify that the sky is blue if there isn't at a minimum some dissenting opinion.

If increased police presence works to deter violent crime, why wouldn't it work to deter white-collar crime likewise?

Because it's not really detectable by patrolling without in-depth investigation. A patrol cop staring at e.g. a stockbroker doing insider trading would not deter it because that wouldn't be visible even as he would be doing the trades. A patrol cop sitting in all Madoff's meetings and sales presentations wouldn't prevent the Madoff scam from succeeding. There's nothing to suggest even getting a warrant without analysis of the actual trade data/accounting information/etc, which cannot really be done by most nonspecialized police officers.

Re: Mathematician Says Big Data Is Causing a ‘Silent Financial Crisis’

#109

Post by NotSammyHagar » Wed, Aug 31, 2016, 6:58 PM UTC

burgreblast wrote: post #77

macintux wrote: post #70

Earlier quoted context omitted.

> Most people don't have any trouble avoiding arrestable behavior. I think we've pretty well established the past couple of years that there is no lower bound on what's considered "arrestable behavior" when it comes to minorities in the US.

>there is no lower bound on what's considered "arrestable behavior" Really? I wouldn't throw in the towel. If there's corruption, that's still a crime. Why not figure out how to highlight it and stop it? When you find bugs in your code do you throw up your hands and proclaim that it could be anywhere so it's too hard to find and fix? Do you not fix the easy-to-see bugs because that's somehow unfair? Do you not fix th…

> If there's corruption, that's still a crime. Why not figure out how to highlight it and stop it?

That sounds nice, but in practice, white collar crime, often committed by white people, has much lower incarceration rates than simple drug crimes. Even in Seattle, where its now legal to posses pot but not legal to smoke it publicly (yet this is routinely ignored), we found that black people were being incarcerated at a much higher rate than white people for public smoking of pot. An investigation found that there was one freaking cop who went around arresting tons of black people for this 'crime'.

This is the world we live in.

Edited to fix a typo

Re: Mathematician Says Big Data Is Causing a ‘Silent Financial Crisis’

#110

Post by YeGoblynQueenne » Wed, Aug 31, 2016, 11:30 PM UTC

burgreblast wrote: post #77

macintux wrote: post #70

Earlier quoted context omitted.

> Most people don't have any trouble avoiding arrestable behavior. I think we've pretty well established the past couple of years that there is no lower bound on what's considered "arrestable behavior" when it comes to minorities in the US.

>there is no lower bound on what's considered "arrestable behavior" Really? I wouldn't throw in the towel. If there's corruption, that's still a crime. Why not figure out how to highlight it and stop it? When you find bugs in your code do you throw up your hands and proclaim that it could be anywhere so it's too hard to find and fix? Do you not fix the easy-to-see bugs because that's somehow unfair? Do you not fix th…

>> When you find bugs in your code do you throw up your hands and proclaim that it could be anywhere so it's too hard to find and fix?

My rule of thumb for reasoning about things other than code: your code is like your code, and nothing else is quite like your code.

Ergo, don't expect that you can fix everything that's wrong with the Western civilisation just 'cause you can debug something you hacked together in a week or so.