When RMSE Lies: Why Your AI Model Might Be Quietly Mispricing Risk
A forecast can be wrong in many ways. It can miss by a little. It can miss by a lot. It can be accurate on average while quietly underestimating rare but expensive outcomes. It can give a beautifully low RMSE while assigning laughably thin probability to the event that later eats the budget. This is the sort of mistake that looks harmless in a dashboard and expensive in a board meeting. ...