9.3 Why Models Matter

A model is a simplified, structured representation of a real-world process — expressed through variables, equations, or algorithms rather than intuition. Models matter because they impose logical coherence on complex situations, enabling organizations to explain what happened, predict what will happen next, and prescribe what to do about it (Larose and Larose 2014).

Research consistently shows that model-based decision-making outperforms intuition alone. Models can process larger datasets, be tested and calibrated rigorously, and are less susceptible to the cognitive biases that affect human judgment. However, models can perpetuate human biases if built on biased data or flawed assumptions — a critical consideration we return to throughout this chapter (Barocas et al. 2023).