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by KYRRO
139 days ago
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I have a question. With the logic of neural networks, and pattern recognition, is it not then possible to "predict" everything in everything? Like predicting the future to an exact "thing"? Is this not a tool to manipulate for instace the stock market? |
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However there are two fundamental problems to computational predictions. The first one obviously is accuracy. A model is a compressed memorization of everything observed so far; a prediction with it is just projecting into the future the observed patterns. In a chaotic system, that goes only so far; the most regular, predictable patterns are obvious to everybody and give less return, and the chaotic system states where prediction would be more valuable are the less reliable. You cannot build a perfect oracle that would fix that.
The second problem is more insidious. Even if you were able to build a perfect oracle, acting on its predictions would become part of the system itself. That would change the outcomes, making the system behave in a different way as it was trained, and thus less reliable. If several people do it at the same time, there's no way to retrain the model to take into account the new behaviour.
There's the possibility (but not a guarantee) to reach a fixed point, that a Nash equilibrium would appear where such system becomes into a stable cycle, but that's not likely in a changing environment where everybody tries to outdo everyone else.