Monday, September 12, 2011

Analytics, Metaphors and Asia

Metaphors and language might go some way towards explaining the varying acceptance of analytics in different cultures, particularly the low take-up in Asia.

Metaphors are known to significantly affect decision making. They trigger analogies and help us compare things that we are unfamiliar with; metaphors allow us to understand one concept in the context of another. They can also be dangerous because, although being ubiquitous, they are hidden within our language and often unnoticed. James Geary has an excellent talk in this subject on TED.

Agent metaphors describe an event as the deliberate action of a living thing. "The Xinhua index climbed 2% today" is a good example. People place greater trust in agent metaphors than they do in object metaphors (where an event is described in non-living terms, such as "The Xinhua index fell 2% today") because they imply that a goal is being actively pursued. Agent metaphors create an expectation that the behaviour will continue and studies have shown that people exposed to agent metaphors in market commentaries tend to be more bullish that than those who read agent metaphors.

One of the strengths of analytics is that it is an objective technique, immune from the effects of metaphor and other decision biases (assuming, that is, that the model designer has also been able avoid such biases). In Asia, however, we find an abundance of metaphors. Every year has an animal associated with it, food is "heaty" or "cooly" and even the characters in chinese script are logograms, derived from pictures of everyday objects, each being imbued with deep meaning and significance.

When even basic economic ideas can only be articulated in such a framework, it is hardly a surprise that the visceral reaction to analytics from many in Asia is one of dubiety.

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