Metric: Difference between revisions

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To be contrasted with the ineffable, inarticulable skills that are provided by a [[subject matter expert]].
To be contrasted with the ineffable, inarticulable skills that are provided by a [[subject matter expert]].
===[[Goodhart’s law]]===
===[[Goodhart’s law]]===
Not a law of economics or sociology so much as a wry remark — professor Goodhart made it at a symposium in 1975 — that, happens to pierce modern management orthodoxy through the heart.  Thus it can both spur its own industry of academic work in sociology and [[systems theory]], and at the same time go ignored in the upper tiers of corporate management:
Not a law of economics or sociology so much as a wry remark — professor Goodhart made it at a symposium in 1975 — that happens to pierce modern management orthodoxy through its heart.  Thus it can both spur its own industry of academic work in sociology and [[systems theory]], and at the same time go ignored in the upper tiers of corporate management:


{{Quote|When a measure becomes a target, it ceases to be a good measure.}}
{{Quote|When a measure becomes a target, it ceases to be a good measure.}}


It is so universal enough to apply even to dolphins. An aquarium in Miami is reported to have dealt with the problem of litter and dead seagulls in the main tank by rewarding dolphins for cleaning them up: a fish for each bird, or piece of litter.
It is universal enough to apply even to dolphins. An aquarium in Miami is reported to have dealt with the problem of litter and dead seagulls in the main tank by rewarding dolphins for cleaning them up: a fish for each bird, or piece of litter.


Before long the dolphins were observed breaking up pieces of litter and claiming multiple fish for one each, and then stockpiling surplus fish, luring seagulls with them, and killing the seagulls!<ref>[https://open.spotify.com/episode/3y799K1qGOhqxPUGcqXwx0 Rationally Speaking podcast episode 240.</ref>
Before long the dolphins were observed breaking up pieces of litter and claiming multiple fish for one each, and then stockpiling surplus fish, luring seagulls with them, and killing the seagulls!<ref>[https://open.spotify.com/episode/3y799K1qGOhqxPUGcqXwx0 Rationally Speaking podcast episode 240.</ref>
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====Extremal====
====Extremal====
Where a given metric is useful ''within a range'' — such a range generally corresponding to “normalcy”: “peacetime”, “normal operating conditions”, “[[business as usual]]” and similar platitudes — but which breaks down, fails, or even reverses itself in extremes or unusual cases beyond that range. Paging Messrs [[Black Scholes option pricing model|Black and Scholes]]. You know, using [[normal distribution]]s of independent events to model dependent events, like human behaviour of the market. These are especially fraught because the 80% of the time these metrics work, and they work fabulously, is exactly the range over which ''it doesn’t matter whether they work or not''. When things ''aren’t'' blowing up. The use case for the metric in the first place, remember, was to warn you about risk events. A “heightened risk” metric that you can only rely on when there isn’t a heightened risk is a ''waste of cheese''.
Where a given metric is useful ''within a range'' — such a range generally corresponds to “normalcy”: “peacetime”, “normal operating conditions”, “[[business as usual]]” and similar platitudes — but which breaks down, fails, or even reverses itself in extremes or unusual cases beyond that range. Paging Messrs [[Black Scholes option pricing model|Black and Scholes]]. You know, using [[normal distribution]]s of independent events to model dependent events, like human behaviour of the market. These are especially fraught because 80% of the time these metrics work, and they work fabulously, is exactly the range over which ''it doesn’t matter whether they work or not''. When things ''aren’t'' blowing up. The use case for the metric in the first place, remember, was to warn you about risk events. A “heightened risk” metric that you can only rely on when there isn’t a heightened risk is a ''waste of cheese''.


====Causal====
====Causal====