Speaking of Narrative Fallacy
By Robert Barker, Infoglide Senior VP & Chief Marketing Officer
Nassim Nicholas Taleb’s book The Black Swan: The Impact of the Highly Improbable uses “narrative fallacy” to describe how we humans tend to enhance ex post facto our ability to predict events that in fact are extremely complex and random. A recent post on Netrics HD attempts to leverage this argument to demonstrate the superiority of “Machine Learning” (i.e. probabilistic analysis) over “data matching” (i.e. deterministic analysis).
Product managers have a long history of creating oversimplified comparisons to competing products and technologies to demonstrate the superiority of their own. A favorite technique is to set up a straw man that can then be knocked down. In the case under discussion, describe a “rules based” system that is very unwieldy to use and requires huge amounts of time to tune, and embed an underlying premise that assumes each new application of a rules-based system starts from scratch with no accumulated domain-specific intelligence. (Of course, this doesn’t work if you choose a more intelligent identity resolution system for comparison.)
We’ve spent time here before talking about the differences between these two approaches, so I’m not going to restate the details again. Truthfully, probabilistic systems like that from Netrics have their place in screening large amounts of data, but like any system, they have their limitations. While they can reach a certain level of performance in emulating users’ decisions, they typically don’t leave a trail for an investigator to follow, they don’t support a rational drill-down into possible suspect transactions the way that deterministic systems do, and they don’t allow attribute-specific tweaking so you can leverage the information and better understanding that you’ve gained over time.
The larger issue is whether a solution can take advantage of appropriate technologies in appropriate circumstances (e.g. using both probabilistic and deterministic analytics in one solution), rather than being forced into an either/or, one-size-fits-all scenario. Solutions like those offered by identity resolution companies supply a framework that can incorporate all of them.
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