T.The holiday travel season is here again! Combining standing in the airport security line with leaving home, Guber became increasingly insane as the clock ticked closer to boarding time, which had magically sped up 45 minutes before he left the house. It’s the most magical time of the year. 2022 is the year of our lords, but we are still confused as to why we have to take our shoes off for safety.
Ai can help fix this. It could perhaps even give ordinary people a taste of the effortless airport experience enjoyed by wealthier travelers.
in their latest book Power and Prediction: The Disruptive Economics of Artificial Intelligence, University of Toronto economists and professors Ajay Agrawal, Joshua Gans, and Avi Goldfarb examine the fundamental impact of AI/ML systems on human decision-making as our reliance on automation and big data prediction increases. In the excerpt below, we speculate what airports of tomorrow might look like if AI eliminated traffic jams and security delays.
Harvard Business Review Press
Reprinted with permission from Harvard Business Review Press.excerpt from Power and Prediction: The Disruptive Economics of Artificial Intelligence By Ajay Agrawal, Joshua Gans, Avi Goldfarb. Copyright 2022 Ajay Agrawal, Joshua Gans, Avi Goldfarb. all rights reserved.
Ajay Agrawal, Joshua Gans, and Avi Goldfarb are economists and professors at the Rotman School of Management, University of Toronto.their previous book Prediction Machines: The Simple Economics of Artificial Intelligence.
A world of alternative airports
As with everything, there are alternative systems that can show you what the other side might look like before considering the potential threat that AI predictions could pose to airports. An example is the alternate world of very wealthy people. They don’t fly commercial, so they don’t have the chance to deal with old or newly designed public airport terminals. Instead, fly private and go through private his terminal. Usually flashy and glamorous, nice restaurants and his art galleries become places where millionaires live. But in the airport world, private terminals are aggressively frugal.
The reason no investment is being made to make private terminals a better place is because the very uncertainty that plagues the rest of us isn’t plaguing the rich. Commercial airlines are bound by schedules, and those planes leave late passengers behind. On the private plane, schedules are more flexible or even non-existent. If the passengers aren’t there, the plane won’t leave until they arrive. If the passengers arrive earlier, the plane will depart at that time. The whole system is designed so that at least there is no waiting on the passenger side. No waiting means you don’t have to invest in making your wait more comfortable. At the same time, rich people have no rules about when they need to go to the airport. If more people could have that experience, the perfect terminal would probably be more humble than a cathedral.
However, you don’t have to be rich to see this otherworldly world. Instead, compare the world on the other side of your arrival gate to the world at your departure. They are frugal if the arrival area is separated from the departure area. There may be a few shops offering snacks, but everything else is designed to be outside the airport. The key issue is how close the taxis and parking facilities are, even if you’re not in a stressful rush. Other than how best to get off, do you remember the details of a typical airport arrival?
AI airport threat
Airports are no stranger to AI. Air traffic control employs AI-based systems to more accurately predict aircraft arrivals and congestion. Eindhoven Airport is piloting a new AI baggage handling system that allows passengers to simply photograph their baggage, unload it and collect it at their destination, no labels required. Subject to privacy requirements, we want to do the same as people.
None of these things, however, affect traffic and security, which are the main drivers of travel-to-flight uncertainty. Navigation apps like Waze can take into account traffic conditions and reasonably estimate the time to the airport based on the time of day. The app isn’t perfect, but it keeps getting better.
The app frees passengers from rules dictating how early they need to leave for the airport. Instead, add that flight time to your calendar, and the app will remind you the best time to depart, and you can schedule your time accordingly. Even better, in the near future, the uncertainty of the actual time flights depart will be taken into account. In addition to telling you when you should depart based on your scheduled departure time, the app will tell you when you should depart according to the flight’s predicted actual departure. Again, uncertainties remain, but moving from no information to more accurate information could save hours of waiting. Similarly, many of his Uber passengers who previously thought they didn’t need to know when a taxi was due to arrive now cite that information as one of his most valuable features of the service. Uber uses his AI to make that prediction. AI can also predict wait times for security lines. Putting it all together, you can use AI to determine when to leave for the airport instead of relying on rules. As with all things, some people jump ahead of this possibility. At Incheon and many other airports, waiting is no longer a bad thing, so you may not need to make an informed decision.
People developing AI-powered navigation apps and flight departure predictions don’t have a direct interest in the revenue of airport activity within terminals. However, the value of AI applications is highly dependent on the number of people who don’t want to wait at the airport. So, if the wait time at the airport is now less, those apps are less valuable. Anticipating security lines is another matter. The airport claims it wants to improve security hours and reduce uncertainty. But as economists, we don’t think their incentives are aligned with passengers. Yes, improving security hours will allow you to spend more time at the facility past security. But it also reduces uncertainty and shortens the time it takes people to get to the airport. Combined with AI that resolves other uncertainties as passengers arrive at terminals, would airports want to take uncertainty under their control?
containment rules
Our broader point is about rules, not airports. Rules come about because there is a cost to accepting uncertainty, but rules create their own problems. The so-called Shirky Principle, put forward by technology writer Clay Shirky, states that “institutions try to keep problems they can solve themselves.” The same is true for business. If your business is to provide a way to help people wait for flights, what are the chances that they won’t have to wait for flights?
If you want to find opportunities by creating new AI-enabled decisions, look beyond the guardrails that protect rules from uncertain outcomes and target activities that make it easier to bear those costs. or reduce the likelihood of bad consequences from the rule. Otherwise, it should be tolerated.
This can be seen in the long-standing protection adopted by farmers in England: building hedgerows. A hedge is a carefully planned set of sturdy trees and plants that act as walls between fields. This is very useful if your fields are full of farm animals and you don’t want to hire people to keep them from getting lost. Also useful if you want to protect. Given all this protection against high-risk events, it is not surprising that this practice is the origin of the term “hedging” and has evolved to have a broader insurance meaning.
But hedges come at a price. Dividing farmland prevents the use of certain farming techniques, including mechanization. This is only efficient on large tracts of land. After World War II, the British government did subsidize the removal of hedgerows, but in some cases the removal was overkill given their role in risk management. Today, most notably the Prince of Wales is a movement to restore hedges led by Costly investments are often made to cover or protect future decision makers from risk. Miles of highways are surrounded by guardrails to keep cars from going down embankments and hills, or hitting oncoming traffic. Fortunately, most have never been used, but given the error-prone nature of human drivers, roads could be built in ways that might otherwise not have been safe enough. increase.
More generally, building codes precisely prescribe various measures to protect people in buildings from uncertain events. These include fires, but also weather damage, weak building foundations, and other natural phenomena such as earthquakes.
What these safeguards have in common is that they usually produce what appear to be over-engineered solutions. They are designed for a specific sequence of events, such as a once-in-a-lifetime storm or a once-in-a-century flood. Engineering seems worthwhile when these events occur. But their absence has reason to wonder. many years, freeconomics Authors Stephen Levitt and Stephen Dubner point out how futile aircraft lifejackets and rafts, let alone their respective safety demonstrations, seem futile given that no aircraft has ever successfully landed on water. Did. Then, in 2009, Captain Sullenberger landed his US Airways plane on the Hudson River with its engine not running. His one example of an unlikely event makes protective lifejackets worth it?It’s hard to know. However, we cannot conclude that just because there is no possible outcome, we evaluate the probability of that outcome as zero.
However, the main point of Levitt and Dubner is that while safeguards are employed to assess the likelihood of potential uncertainty or changes in likelihood over time, it is often possible , that it is impossible to measure whether the investments made have been made to reduce the likelihood of potential uncertainties. The results are excessive, because the very risk management strategies employed rob that information. It’s entirely possible that too much is wasted on something that for other reasons isn’t risky at all.
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