AI’s time may have finally come, but more progress is needed
Traditionally, economic modeling has been modeled in the linear domain where the principles of superposition are valid. The application of artificial intelligence for economic modeling allows for a flexible multi-order non-linear modeling. In addition, game theory has largely been applied in economic modeling.
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Save to Library. Create Alert. Share This Paper. Topics from this paper. Quantum superposition Multilayer perceptron Time—frequency analysis Fractal Mathematical optimization. Relevance Simulation Swarm. Citations Publications citing this paper. Can rationality be measured? Tshilidzi Marwala. The following list presents some examples where organizations have improved bottom line profitability by improving the forecasting process.
In a turbulent business environment, forecasting can lead to significant competitive advantage as well as to costly mistakes.
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Forecasting errors impact organizations in two ways. The first is when faulty estimates lead to poor strategic choices, and the second is when inaccurate forecasts impair performance within the existing strategic plan. An example of the former would be to increase the level of vertical integration based on a forecast of stable demand when demand actually turned out to be highly unstable.
An example of the latter would be to significantly increase facility capacity based on a forecast of strong demand when, in fact, demand turned out to be soft. Either way there will be a negative impact on profitability. The following process outlines a plan for improving forecast accuracy using artificial intelligence support systems:.
A primary objective for using AI is to better integrate the managerial and quantitative estimates and thereby reducing the forecasting errors. Organizations that currently utilize AI may increase the accuracy of forecasts by improving data collection methods and expanding efforts to gather market intelligence.
Past customer behavior is often a reliable data source of future behavior. Finally, as in other areas of knowledge management, it is critical to maintain strong support for the forecasting process from the entire management team. Once upon a time, two economists were walking together when one of them saw something that caught his attention.
An analysis of how to achieve a greater degree of synergy with merger-and-acquisition growth strategies. If the capital markets are to function safely and fairly, incentives need to be re-aligned so that neither terrorism nor fraud is rewarded. Emerging information technologies and artificial intelligence AI techniques can improve the accuracy of forecasts and enhance the bottom line. In this regard, companies are carefully revisiting their supply-chain.
In particular, as Business 2. New technologies continue to transform the Web into a viable business tool and sales channel that saves money and increases operational efficiency. The Digital Age has the potential to be as disruptive and transformative for us as the Industrial Revolution was for our ancestors; that disruption could threaten our capitalist system and our democracy. Rapid technological development in AI has led to speculation of a catastrophic demise of the auditing profession.
The primary weakness in this use of AI for auditing is that machines initially learn from flawed systems: humans. To support startups and new ventures in the digital space, ICOs and STOs have the potential to streamline, decentralize, and disintermediate the capital raising process, creating advantages for both entrepreneurs and investors. Application: Better forecasts yield enhanced bottom line results.
Economics , Marketing. A new generation of artificial intelligence technologies have emerged that hold considerable promise in helping improve the forecasting process including such applications as product demand, employee turnover, cash flow, distribution requirements, manpower forecasting, and inventory.
These AI based systems are designed to bridge the gap between the two traditional forecasting approaches: managerial and quantitative. To the general public, artificial intelligence conjures up visions of science fiction as illustrated in films such as The Terminator, The Matrix, and A.
Artificial Intelligence and Economic Theories
In reality, AI has considerable potential for improving productivity throughout the organization. The human brain contains on the order of 10 11 neurons. While this number is impressive the number of synapses, estimated at 10 16 , is truly unbelievable. This is equivalent to the number of printed characters in all of the books contained in the United States Library of Congress times over!
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By contrast a typical forecasting application might contain a few thousand neurons. Literacy grew out of the collision of the steam engine and the printing press. We may be in for some real surprises. Will this process cause sophisticated artificial intelligence to finally burst onto the scene?
Share Facebook. Author of the article Author's profile. Owen P. Hall, Jr. He has more than 35 years of academic and industry experience in mobile learning technologies and business analytics. More articles from Volume 5 Issue 2. Making Mergers a Growth Strategy An analysis of how to achieve a greater degree of synergy with merger-and-acquisition growth strategies.
Sealing Cracks in the Capital Markets If the capital markets are to function safely and fairly, incentives need to be re-aligned so that neither terrorism nor fraud is rewarded. Artificial Intelligence Techniques Enhance Business Forecasts Emerging information technologies and artificial intelligence AI techniques can improve the accuracy of forecasts and enhance the bottom line.
By Owen P. E-Commerce Reboots New technologies continue to transform the Web into a viable business tool and sales channel that saves money and increases operational efficiency. By David M. Modernizing Capitalism: Saving the American Dream The Digital Age has the potential to be as disruptive and transformative for us as the Industrial Revolution was for our ancestors; that disruption could threaten our capitalist system and our democracy.
By Edward D. Auditing in the Smart Machine Age Rapid technological development in AI has led to speculation of a catastrophic demise of the auditing profession.