In Isaac Asimov’s Foundation series, a scientist named Hari Seldon invents psychohistory, combining sociology and statistics to predict a population’s behaviour. The Internet is helping turn that fiction into reality.
Hedge funds now track millions of tweets a day to gauge the mood of investors. Software parses news stories word by word, for nuggets of insight that can be translated into buy or sell calls. (Even emoticons are grist to their mill.) The quest for that extra byte of data, obtained a nano second ahead of the competition, just got more heated.
The scepticism—of decisions hinging on the choice of a word or a smiley—comes naturally. In Foundation, Seldon’s science proved awful at dealing with Black Swan events. These new techniques, in the long term, may find themselves similarly constrained—with consequences that aren’t fiction, but all too real.