Can you imagine an investment AI that did not have human biases. Here are some my favorite investor biases:
SALIENCY bias. People remember memorable things. The guy who made $100 million by investing in a Romanian immigrant will invest in you if you're a Romanian immigrant, but not if you're one country over even if their education and politics are the same. Computers don't care.
AVAILABILITY bias. People analyze data that is available. If you have worldwide sales figures your market seems huge. If you no data investors will be strongly prejudiced against it.
CONFIRMATION bias. Investors who have a bubble mentality will see the positive and reinforce their theory, however non-rooted in facts (for example the theory that silicon valley teams will succeed and, for example, foreign teams will fail)
An AI would not suffer from any of these. However, due to the skills required to evaluate a pitch, the AI would have to be much, much smarter than any expert system today. Today you can't even tell a robot how to boil a pot of water (no matter how explicit your verbal description is) or anything else, and have it even come close to succeeding.
We're far away from robots (AI) evaluating pitches and business plans. But how cool would that be!
> Can you imagine an investment AI that did not have human biases. Here are some my favorite investor biases:
It's actually a trivial problem. Just need to ask a few questions to determine the investor risk profile and goals, then pick the appropriate Vanguard fund.
SALIENCY bias. People remember memorable things. The guy who made $100 million by investing in a Romanian immigrant will invest in you if you're a Romanian immigrant, but not if you're one country over even if their education and politics are the same. Computers don't care.
AVAILABILITY bias. People analyze data that is available. If you have worldwide sales figures your market seems huge. If you no data investors will be strongly prejudiced against it.
CONFIRMATION bias. Investors who have a bubble mentality will see the positive and reinforce their theory, however non-rooted in facts (for example the theory that silicon valley teams will succeed and, for example, foreign teams will fail)
There are a bunch more, too.
http://rationalwiki.org/wiki/List_of_cognitive_biases
https://en.wikipedia.org/wiki/List_of_cognitive_biases
An AI would not suffer from any of these. However, due to the skills required to evaluate a pitch, the AI would have to be much, much smarter than any expert system today. Today you can't even tell a robot how to boil a pot of water (no matter how explicit your verbal description is) or anything else, and have it even come close to succeeding.
We're far away from robots (AI) evaluating pitches and business plans. But how cool would that be!