Liberty, Equality, and Fraternity, After All?

It’s too early to say.

Markovian Processes

Induction is a tool used by actuaries when they determine future insurance premiums, a problem in which there are variations within limits or at least long-lasting trends exist. Variation often depends on the current state, such as the length of a queue. We may refer to processes that depend on their current state, but can’t recall prior states — Markovian. Regrettably, reality is usually not very eager to behave in this nice way, especially when there are many unknown unknowns.

(1) A Bernoullian trial—in which a person flips a coin—has has a stationary probability distribution. There is no current state. (2) A fictive Markovian process—in which teams having one-week-sprints are only 1% likely to decide that the next sprint should last for three or more weeks—has a current state, but no memory of prior states. (3) A path-dependent process never returns to the same state because every event from the past, potentially influences the future. We continuously add new learnings.

Bernoullian Processes

After all, we would achieve the best predictability if we had a general rule that was always true. Based on that rule, we can calculate (deduce) in advance what effect we would get from a more specific action. We call this approach deductive reasoning. Here is an example: The 𝚜𝚞𝚍𝚘 𝚛𝚖 -𝚏𝚛 <𝚏𝚘𝚕𝚍𝚎𝚛> command not only deletes all French files in <𝚏𝚘𝚕𝚍𝚎𝚛>, but it also deletes all other files and folders there! From this rule, we can easily deduce that the more specific 𝚜𝚞𝚍𝚘 𝚛𝚖 -𝚏𝚛 ~ deletes all files in our home directory. Deductive reasoning is sometimes handy when we draw conclusions from deterministic models like timetables, economic order quantity models, and accounting.

Path-Dependent Processes

No matter if events occurred recently or 200 years ago–like the French Revolution and liberté, égalité, fraternité — they still affect us, and after they happen only once, nothing is the same. Processes irrevocably bound to events in the past are sometimes called path-dependent. When we deal with these processes, abductive reasoning may come to the rescue.

  • We may deduce the output from a general rule and a specific input. And a general rule can be induced when we have several observations. However, when humans are involved, most processes are path dependent. This is why we should start with an abductive approach.



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Staffan Nöteberg

🌱 Twenty Years of Agile Coaching and Leadership • Monotasking and Pomodoro books (700.000 copies sold)