Signal and noise depend a bit on the perspective. I apply the conception from Kahnemann and if you are interested in more, reading Kahnemann’s latest book or listening to a podcast of him speak about the book is good.
Kahnemann does go through examples of an insurance company that treated the interrater quotes for insurance policies as noise and then used machine learning to cut down on that noise.
It’s worth noting that low noise is not universally desirable. I remember some VC firm that said they had a policy that if all partners thought it should invest in a company that it would not invest. That’s because the wisdom of the crowd does not make good VC investment decisions.
Signal and noise depend a bit on the perspective. I apply the conception from Kahnemann and if you are interested in more, reading Kahnemann’s latest book or listening to a podcast of him speak about the book is good.
Kahnemann does go through examples of an insurance company that treated the interrater quotes for insurance policies as noise and then used machine learning to cut down on that noise.
It’s worth noting that low noise is not universally desirable. I remember some VC firm that said they had a policy that if all partners thought it should invest in a company that it would not invest. That’s because the wisdom of the crowd does not make good VC investment decisions.