Algorithms Are Great and All, but They Can Also Ruin Lives

Re:Algorithms Are Great and All, but They Can Also Ruin Lives by pdabbadabba on Wednesday November 19, 2014 @01:47PM (#8631800)

The unfortunate thing about these examples is that I don't think that they illustrate malfunctioning algorithms. As far as creditors or insurers are concerned, your bringing a claim against a landlord or insurer does indicate that, from the perspective of their bottom lines, you are a higher risk individual. I.e., they would prefer to lend to/rent to/insure a person who is unlikely to bring claims against them, even when she has a right to. That's one of the things that, from a cultural/social/moral perspective, is wrong with this system of risk assessment: it penalizes people for doing things that are entirely within their rights by decoupling risk from fault.

I'm not sure that there is a solution to this other than regulation, though.

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Re:Algorithms Are Great and All, but They Can Also Ruin Lives by arebop on Wednesday November 19, 2014 @01:53PM (#8631830)

If you are a company that is rarely at fault, then it would be great to be able to separate risk from fault and take the customers that your competition is overcharging.

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Re:Algorithms Are Great and All, but They Can Also Ruin Lives by pdabbadabba on Wednesday November 19, 2014 @02:22PM (#8632037)

Great point! One problem, though, is that it takes money to keep your own level of fault low, to accurately measure your track record, and to discriminate between fault and no-fault risk. All this cost may undermine your ability to sell a cheaper product to low-fault individuals. Another complication is that sometimes neither you nor your customer will be at fault (either because nobody is at fault at all, or because a third party is at fault).

Finally, in the credit arena, risk information is pooled between creditors, some of whom may be more likely than others to have been at fault in a given dispute. You'd have to figure out how to refine a customer's risk profile based on the data from a credit reporting agency, or source all the data you needed yourself.

If you could overcome these challenges, though, (and maybe you could) I think you'd have a great business.

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