Some people have a special gift for predicting the twists and turns of chaotic systems like the weather and perhaps even financial markets, according to an Australian psychologist.
Richard Heath, who has now moved to the UK’s University of Sunderland tried to identify people who can do this by showing volunteers a list of eight numbers and asking them to predict the next four. The volunteers were told that the numbers were maximum temperatures for the previous eight days. In fact the numbers were computer-generated: some sets were part of a chaotic series while the rest were random.
Random sequences are by their nature unpredictable, whereas chaotic sequences follow specific rules. Despite this, chaotic sequences are very hard to predict in practice because of the “butterfly effect” – even an unmeasurably small change in initial conditions can have a dramatic impact on their future state.
Nonetheless, Heath found that a quarter of the people he tested could predict the temperature for at least the next two days if the sequence was chaotic, rather than random, even though there is no obvious pattern to the figures.
The above link is a 6 year old article from New Scientist. It is about one of my favorite papers: Can People Predict Chaotic Sequences?
My post on Friday about entrepreneurs and their ability to make decisions under stress reminded me of it. Heath’s paper was a small study but I was intrigued by the possibility that a fraction of the population, about 25%, might be capable of seeing a pattern in information that the rest of the population sees only as random noise.
In situations where conditions change rapidly, where there is no stasis but the need to make useful decisions is paramount, being able to see underlying patterns, even very complex ones, would seem to be a real boon.
I wonder how a group of entrepreneurs would do with his tests?