Reality is not discrete


Einstein once said: “Make things as simple as possible, but not simpler.”

Many aspects of our daily life are still ruled by oversimplified models. These models made sense in the moment they were introduced but deliver a terrible performance compared to what would be possible using modern information technology.

A few examples:

  • When you go to the supermarket and buy a bottle of milk you usually pay the same price no matter if it`s expiration date is tomorrow or in 10 days. Not only that this leads to food being wasted it also increases the price of products. Manually changing prices is a lot of effort. Some use stickers to manually adjust the price in discrete percentage steps. However this again is not reflecting the true value of the product.

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  • Recently an airline announced that they will further reduce seat spacing to the equal length of 73.7 cm completely ignoring the fact that the size of 300 passengers follows a normal distribution. Instead of placing seats with different spacing and use modern information technology to assign seats to passengers according to their body size they decided to go the easy but suboptimal way of squeezing tall people in tiny equally spaced buckets.

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  • Using the subway in a big city on Monday morning at 8:30am comes at the same price as using it on Saturday at 6am. You pay the same money for a completely different experience. Having a flexible pricing model in place where you pay according to the number of people in the subway would allow us to smooth peak loads.

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  • If you park your car in Vienna you pay the same amount no matter if it’s a pickup or a mini.

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These are all examples where we decided to use a classification model where a regression model would be a much better fit. Information Technology became quite cheap and would allow us to introduce these more advanced models to better describe reality. The internet of things could make our life much smarter and more efficient if there is a political will and vision to do it.


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