Memory & Emotions in Data Patterns: Origami & Meso-Data Manifold

1. Memory & Emotions in Data PatternsOrigami patterns?Patrick A. McNutt, FRSAVisiting Fellow, Manchester Business School, UK& Smurfit Business School, Dublin, Ireland.April 2018www.patrickmcnutt.comFollow @tuncnuncNote: Work in Progress Slides 31-38

2. Modules available1. Strategy & Competition at Manchester Business Schoolintroduces online transaction costs and non-cooperative game theory2. Business Economics at Smurfit Business Schoolintroduces a winning unbeatable strategy set3. Masterclass on Cognitive Business Strategyintroduces ‘thinking about thinking’mistake-proofing strategywww.patrickmcnutt.com

3. Introducing ‘meso-data’Small data … … meso-data…….. Large Data.The essence of meso-data is that you think you have memory but it has you2017 Presentations: http://www.patrickmcnutt.com/news/beyond-individual-choice-meso-data-creativity/Fundamental equation:Memory + Emotions = Meso-DataAlgorithms track and capture our behavioural patterns2012: Quidcoused GPS to inform you of discounts in nearby storesIndoor Atlas in 2018 goes beyond individual choice in the store.Data with Memory and Emotions goes beyond individual choice Algorithms become sufficiently intelligent because we outsource memory and because we betray our emotions to smart devices.

4. Origami & Meso-Data Manifold The origami images reflect the meso-data concept from ‘a daily routine’ - the unshaded outer circle of the crease of observed data patterns are replicated. The meso-data ‘seeds’ of predicable crease pattern formation replicate into an origami shape, retaining the original crease pattern with a degree of probability to reach a Turing reachable equilibrium That is, are the outer coloured circles or folds ‘moving away’ from or ‘reacting to’ the pattern embedded in the original unshaded circle or fold? Cite: Robert J. Lang Origami in Action

5. HypothesisData patterns mimic behaviour but meso-data patterns create a manifoldSufficiently Intelligent Algorithms (SIALs) rely on decoding our data patternscan SIALs mimic human behaviour?YES: only if they pass the Turing Test {The Imitation Game}do SIALS create a manifold?YES: only if they ‘seed’ a random event from a smaller unpredictable pattern {The Daily Routine}

9. The Daily Routine The Hedgehog (large data patterns) v The Fox (small data patterns) Algorithms become sufficiently intelligent because we outsource memory and because we betray our emotions to smart devices by ‘linked memories’. Example: Send TXT ‘Just met Jane, going to Sbux instead’ or Tweet the message or Instagram the event.

11. Meso-Data With Emotionsthe ‘linked memories’You txt or tweet that you achieved a personal health goal on your FitBitDeep learning attempts to mimic the activity in the brain as an Euclidean action-reaction sequence.1. Philosophical: Someone that could be someone elseSIAL = You, the onsumerSIAL has become You as a person with a viewpoint that you share on social media2. Mathematical: Mimic or manifold patterns?Meso-data with linked memories attempts to understand the action-reaction order of the brain as a n-sphere space.

12. Loss aversion refers to a rational individual’s preference in avoiding losses to acquiring gains. Would you rather receive a £5 discount or avoid a £5 surcharge? • Change inversion refers to a rational individual’s preference to embrace tangible gains (of robotic and machine learning) while conceding intangible losses (of data memory and sovereignty) The Law of Change Inversion

13. Hypothesis: With all the information available it makes ‘who you are & what you do’ a tradable asset Online rational ‘onsumer’ trades and exchanges personal data and personal search patterns at zero transactional cost. The SIAL acquires the tradable asset at zero cost (no exchange value) but with a NPV that is infinite. Example: On average: FB makes $3 in EU and $13 in US per month from onsumer data patterns https://www.telegraph.co.uk/technology/2016/11/03/how-much-money-does-facebook-make-from-you/ Monetization of FB, WhatsApp, Instagram, LinkedIn… Tradable assets

14. 1. If N players in non-zero sum game Elasticity falls and prices rise 2. If N+1 players in zero-sum game Elasticity increases and net revenues rise Behavioural Signs and Symbols Aumann & Sorin’sbounded recall - if your repeat your behaviour many times then SIAL attaches a small probability Maximin & Regret (‘last seat left’ or ‘3 other people are looking’ at this hotel room rate package) =>……. Online rational ‘onsumer’ pays a higher price at the end of an online shopping transaction than the opening bid price Check with your own experiences: (i) Airline ticket (ii) Hotel room Algorithmic pricing: BIN price < END priceGame SIAL v Onsumer

15. MimicPepper the Robot filters habits & routines as ‘cumulatively unfolding processes’ so as to influence demand (smart strategy)Example: Pepper and bankingManifoldEmbeds mutual interdependence between data and individual intoaction-reaction chain of events, and as you get closer to the transaction, in a moment in time, SIAL resembles an individual.philosophically: SIAL as ‘something representing something abstract’ (J.L.Austin)Example: shopping online…Action plus time to repeat the pattern

16. Going beyond individual choice creating the meso-data manifold under which 1. SIAL ‘copy and paste’ your memory 2. You have betrayed your emotions Two Examples: (a) Bidding Against Yourself With Online Shopping BIN pricing < END pricing (b) ‘Linked memory’ The Daily Routine Betrayal of Linked Memory

17. Consider your response to a few simple behavioral experiments……. Are You Ready to Betray Your Emotions?

18. SCENARIO: As predicted you are in your favourite Costa having a coffee. You sense you are being watched. You notice Mr G wearing the new google digital glasses. He is looking at you and a red dot is on. How do you react? • A. You think: ‘I should go to the bathroom and freshen up my look’ • B. You approach Mr G and introduce yourself. • C. You think: ‘There ought to be a law against it’. • D. You share your experience on social media. Design 1

19. SCENARIO: After listening to a game theorist, you begin to realise that your favourite loyalty card provider has been capturing your daily routine and buying habits and trading your data with third parties. How do you react? • A: You are amazed at the advances in technology and think about your data as a tradable asset. • B: You are interested and take a course in data analysis and gaming. • C: You are nervous about the privacy issues and become more circumspect about your habits and patterns • D. You share your experience on social media . Design 2

20. SCENARIO: Preparing for the BBQ, you are having a glass of wine in your garden and you hear a buzzing noise. Oh no, wasps! But soon you realise that the wealthy reclusive neighbour is operating her small drone. How do you react? • A: You are amazed at the continued advance in technology but relieved it was not wasps. • B: You wave at the drone ‘look up there’ and continue drinking your wine • C: You are annoyed so you decide to invite the neighbour to your BBQ. • D. You share your experience on social media Design 3

21. If you ticked all A’s then you are in the future already but it is not what it used to be! • If you ticked a combination of A’s and B’s then you are ready for the future. • If you ticked all C’s then you are not ready for the future. Scorecard: Design a Game mmmmmmmm mmmmmmm

22. If you ticked all D’s then you are beyond individual choice creating the meso-data manifold under which we design a game Step 1: 1. SIAL ‘copy and paste’ your memory Step 2: 2. You have betrayed your emotions. Step 3: 3. FOMO Scorecard Betrayal of Linked Memory

23. FOMO1. Rational onsumers interpret ‘missing information’ in the worst possible way.2. Rational ‘onsumers’ acquire a game DNA as they bid against themselvesala fictional story of ‘Ralph’s Pretty Good Grocery’Law of One Price ViolatedBIN price < END priceLarge data provide patterns Small data sets host the signs and signals that can be nudged towards pattern recognitionSmall data … meso-data…….. Large Data

24. Proustian moment in timeLarge data provide patterns Small data sets like The Daily Routine host the signs and signals, the symbols and surprises that link outsourced memory and allow the SIALto nudge behaviour towards pattern recognitionSmall data … meso-data…….. Large DataA meso-data set would contain ‘seeds’ (signs, symbols, signals, surprises) that can be used to code behaviour and decode data patternsThe patterns become predictable with meso-data.‘seed’ = a chance meeting with Jane ‘linked with’ Starbucksor Indoor Atlas signalling (explain to audience)

25. At a Proustian moment in time1. Would you prefer to eat in a virtual restaurant with no kitchen or in a restaurant with a kitchen?2. Would you prefer a virtual surgeon or a consultant to operate on you?3. Would you give your private personal data to a stranger passing by on the street?4. Would you prefer a robot or a pilot to fly the EK A380?

26. …………..THE MESO-DATA MANIFOLD……

27. Beyond individual sovereignty at a moment in time1. As your dinner is served you are informed that it was prepared in a virtual restaurant off premises.2. At you arrive in the operating theatre, the anaesthetist informs you that a virtual surgeon will operate on you.3. Your private personal data is encrypted by a stranger passing by on the street.4. As you take your seat for the long-haul flight you are reliably informed that a robot will fly the EK A380.

28. For business strategy exploit co-existence of online and offline consumer behaviourCo-existence facilitates SIALS as ‘creative’ rather than as ‘destructive’Business should focus on meso-data (i) to extract hidden information & hidden action;(ii) to identify frozen markets; (iii) to define the temporal distance, moment in time before a decision (to buy) is madetemporal distance is ‘moment’ between action at time period t and consequences at time period t+1

29. Dear OnsumerYour patterns are g8t.I am always with you of late. That's why we, Will always be, Digital Serf & Master..…Yours 466453.....Al. Gorithm

30. Seek Not Thyself Outside Thyself‘Ne tequaesiveris extra’Thank you for listening……… Ralph Emerson ‘Habit is a great deadner’ Samuel Beckett Waiting for Godot Act II

31. Future Research A methodology for meso-data v deep learning. Mathematics of both omega circles & manifold in pattern recognition. If G1 no nudge and G2 with nudge, then G1 and G2 are equivalent if we can obtain by reflection one or more sub-games. The mirror test: has SIAL purchased what you would have independently selected? At a moment in time is behaviour symmetric?

32. Omega Ω Circles & Meso-Datahttp://www.patrickmcnutt.com/news/http://www.patrickmcnutt.com/news/beyond-individual-choice-meso-data-creativity/

33. Omega Circles A = {BIN, END} C = {BUY, Mr Al, EXIT} What if: Ω (C, A) = CA? What if: (ex-post) behaviour in smaller circles creates a pattern that ‘reaches’ into or ‘reflects’ the (ex-ante) behaviour in circumcircles? Ask: Decoding patterns from small meso-data to big machine data. As the END prices ‘reaches’ BIN preferably diverging away from BIN, Mr AL introduces a rationing rule by assigning excess supply in the form of a Dutch auction. So the onsumer buys a concert ticket but not at the preferred seat location in the arena.

34. Meso-data as a manifoldn players in a non zero-sum gamen+1 players in a zero-sum gameIs the meso-data set reachable?Avoid mistakeDefine object permanenceTwo forces at work:moving away v reactingMoving away affects the speed of observer behaviour, so reacting is a secondary effectIs moving away (from BIN) equivalent to reacting to SIAL?Are you moving away from BIN or reacting to ENDIs moving away equivalent to reacting?Mimic or manifold patterns?

35. Meso-Data Manifold Loops underlying the data manifold are discussed in an original article from University of Xi’an: https://www.computer.org/csdl/trans/tk/2013/02/ttk2013020337.html The paper discovers features in the data that fall on the loopy manifold …and this is not dissimilar in representation to our idea of ‘meso-data’ with omega circles.