Jordan Montgomery #47 of the New York Yankees in action against the Baltimore Orioles at Yankee Stadium on Sept. 12, 2020 in New York City.Artificial intelligence continues to be newsworthy and certainly drives some stock market behaviour. Consider that senior executives at Standard & Poor’s 500 companies mentioned the terms AI or artificial intelligence an average of 3.7 times per call with analysts late in the second quarter of 2023, more than double the 1.
The interplay of prediction and judgment can be seen now in the playoffs in Major League Baseball. Jordan Montgomery, the star pitcher for the Texas Rangers, has won three of his starts in the playoffs so far. The New York Yankees traded him last year because they didn’t trust Montgomery to win big postseason games.
The New York Yankees didn’t make the playoffs in 2023. But this is a league-wide issue that also affected the 2023 Blue Jays, whose starting pitchers averaged five to six innings per game. Of course, starters can’t always make it to late innings because of fatigue or ineffectiveness in a particular game. The key is to make a judgment whether a pitcher can figure his way out of a hole or not.
These limits of data and the prediction machine can have costly implications for companies and investors. In February, 2021, the tech-based real estate company Zillow Group Inc. confidently touted its AI solution to value homes, and used it to make cash offers to purchase properties. By November, 2021, however, Zillow had an abrupt. It shut down the service and took a US$304-million inventory writedown due to recently buying homes for prices higher than it could realize by reselling them.