Think Like a Freak

by Steven D. Levitt

“Oh, the monkey-with-a-dartboard comparison, that comes back to haunt me all the time,” he says. “But with respect to how they did relative to, say, a baseline group of Berkeley undergraduates making predictions, they did somewhat better than that. Did they do better than an extrapolation algorithm? No, they did not.” Tetlock’s “extrapolation algorithm” is simply a computer programmed to predict “no change in current situation.” Which, if you think about it, is a computer’s way of saying “I don’t know.” A similar study by a firm called CXO Advisory Group covered more than 6,000 predictions by stock-market experts over several years. It found an overall accuracy rate of 47.4 percent. Again, the dart-throwing chimp likely would have done just as well—and, when you consider investment fees, at a fraction of the cost.