Intellifest 2012: Kenny Shi: Emotional Business Rules

on October 25, 2012
SMARTS™ Data-Powered Decision Management Platform

Kenny Shi, from eBay, had a very interesting (and nicely presented) talk on emotional business rules.

Kenny works, among other things, on the management of fraud within the eBay marketplace. As a marketplace, the opportunities for fraud are significant, and while the vast majority of users is essentially good (or regulation abiding), fraud, even small in numbers, can have devastating consequences. Managing fraud is in essence a process of managing a number of metrics within established business metrics. Some of those are:

  • catch rate
  • hit rate
  • number of account take-overs
  • net promoter losses
  • consumer losses
  • buyer protection losses
  • etc…

Establishing compromises across of all these compromises is a complex enterprise, and it involves significantly more than just mathematical formulas.

Kenny has always been interested in emotions, and how emotions impact the way we think and act.  A good source for understanding how emotions interact and evolve is the “We Feel Fine” project.

Emotions are everywhere, and do impact significantly the way we think and decide. For example, there are very strong correlations between emotional states and clothing being worn. Publicists know this well: connecting a connection to a brand or product based on an emotional state is probably the most powerful advertising technique.

This impact has been recognized for a long time, including in the AI community. Marvin Minsky, in his book The Emotion Machine states that “emotions are certain ways to think that we use to increase of our resourcefulness (…) a substantial part of what we call intelligence”. More recently, Daniel Kahneman, in his book Thinking Fast and Slow makes the distinction between System 1 (fast, instinctive, emotional) and System 2 (slower, deliberative, logical) in the way we think and react (this is one of the books I’ve appreciated the most in the last couple of years).

Coming back to business rules, we need to go the basics: their goal is to maximize certain business objectives, while minimizing certain business costs, including their management. As pointed out earlier, the equilibrium between all of the constraints the goals need to be achieved in is difficult to define. Furthermore, emotions indirectly affect some of these: for example, the likelihood of a user buying again is directly proportional the page load speed.

Kenny uses an emotional-based approach for some of the decisions made in fraud. The rules in questions are essentially “System 1” instinctive/emotional decisions that allows a large part of the expenses involved in identifying fraud to be avoided: for example, only images that satisfy some basic “emotional” characteristics are sent to OCR systems for further, more expensive, processing.

Of course, in such an approach, monitoring and revising the “System 1” approach becomes crucial.

Interesting talk!

Learn more about Decision Management and Sparkling Logic’s SMARTS™ Data-Powered Decision Manager

Search Posts by Category

ABOUT US

Sparkling Logic Inc. is a Silicon Valley-based company dedicated to helping organizations automate and optimize key decisions in daily business operations and customer interactions in a low-code, no-code environment. Our core product, SMARTS™ Data-Powered Decision Manager, is an all-in-one decision management platform designed for business analysts to quickly automate and continuously optimize complex operational decisions. Learn more by requesting a live demo or free trial today.