Quants for the rest of us
A few days ago I wrote about the idea of having a quant group working for consumers rather than against them. Today I wanted to spell out a few things I think that group could do.
The way I see it, there’s this whole revolution of data and technology and modeling going on right now, but only people with enough dough to pay for the quants are actually actively benefiting from the revolution. So people in finance, obviously, but also internet advertising companies.
The problem with this, besides the lopsidedness of it all, is that the actual models being used are for the most part predatory rather than helpful to the average person.
In other words, most models are answering question of the form:
It all makes sense: these are businesses that are essentially bloodthirsty, making their money off your clicks and purchases. They are not going away.
- how can we get you to spend money you don’t necessarily want to spend? or
- how good a credit risk are you? or
- how likely are you to come back and spend more money? or
- how can we anticipate the market responding to end-of-month accounting shenanigans? I just threw this one in to give people a sense of how finance models work.
Then there are some models that are already out there trying to make the user experience more enjoyable. They answer questions of the form:
The problem, as you can see, is that these second, helpfulish kinds of things quickly devolve into the first, predatory kinds of things. In other words, you’re being bombarded by ads and suggestions for spending more money than you actually want to spend....MORE
- If you like that, what else may you like? (Pandora, Netflix, Google)
- If you bought that last week, maybe you’d like to buy it again this week?
- If you bought that, maybe you’d like to buy this now?