Yes, in short. Emilio Calvano, Giacomo Calzolari, Vincenzo Denicolò and Sergio Pastorello cover this topic in the latest issue of the American Economic Review:
Increasingly, algorithms are supplanting human decision-makers in pricing goods and services. To analyze the possible consequences, we study experimentally the behavior of algorithms powered by Artificial Intelligence (Q-learning) in a workhorse oligopoly model of repeated price competition. We find that the algorithms consistently learn to charge supracompetitive prices, without communicating with one another. The high prices are sustained by collusive strategies with a finite phase of punishment followed by a gradual return to cooperation. This finding is robust to asymmetries in cost or demand, changes in the number of players, and various forms of uncertainty.
Here is the paper.
The cheapest deal, at $6.99, was offered to queer females aged under 30. City-based straight men over 50 were meanwhile given the most expensive rate, at $34.37. Choice investigators could not find a pattern to explain the differences, and have appealed to Australia’s consumer watchdog, the ACCC, to investigate whether Tinder might be in breach of national consumer law.
Here is the full story, via an MR reader.
Art historian turned blockchain artist Robert Alice has created “Portrait of a Mind” — a monumental series of 40 paintings stretching over 50 meters in length.
Drawing on the history of 20th century conceptualism as well as the founding myth of Bitcoin’s creation, “Portrait of a Mind” is a complete hand-painted transcription of the 12.3 million digits of the code that launched the cryptocurrency.
By scattering the codebase into 40 globally distributed fragments, the project will “draw up a global network of 40 collectors where no one individual will hold all the code,” Alice said.
He explained: “In each work, an algorithm has found a set of hex digits that together are highlighted in gold. These read a set of coordinates that are unique to each painting. 40 locations across 40 paintings – each location is of particular significance to the history of Bitcoin.”
Speaking to Cointelegraph, Alice said he remains curious as to why much of the commemoration of Bitcoin emphasizes the publication of the whitepaper over and above the codebase itself, which, for him, is “the real historical document.”
Christie’s will sell one painting from the series, “Block 21 (42.36433° N, -71.26189° E),” as part of its “Post-War and Contemporary Day Auction” on Oct. 7, at the end of a week-long exhibition of auctioned works in New York.
The piece includes a unique fungible token as an integral part of the work and will be offered at an estimated price of $12–18,000.
Here is the full story, via Shaffin Shariff.
I say focus on data protection but let them keep the algorithm. From my new Bloomberg column here is one excerpt:
A second principle for good policy is that the U.S. government should not cut off the U.S. — including of course Chinese Americans and visiting Chinese — from the Chinese internet. Let’s say TikTok and WeChat are banned altogether, along the lines of the (now court-halted) Trump executive order banning WeChat. Are all Chinese apps to be kept out of the country? How about clicking on Chinese links, which also could compromise security? Would Chinese newspapers (including from Hong Kong) be allowed?
The costs of these restrictions would be very high, most of all for Hong Kong, but for America too. Americans would become more ignorant about China, and China would fall out of touch with America. Chinese students and tourists would find it much more difficult to come to the U.S. and stay in touch with home, and as a result many of them would avoid the U.S. altogether. America’s world knowledge and soft power would decline. These too are major national security disadvantages, in addition to their economic costs.
More generally, China is America’s No. 1 trading partner. Can it really make sense to cut off the flow of so much information across the internet? For how long?
There is also a problem of enforcement. The rest of the world is unlikely to take a comparably harsh approach to Chinese technology. Will the U.S. also have to stop Americans from downloading an app from a privately owned joint Cambodian/Chinese company? Where exactly will these lines be drawn?
Regulating the algorithm won’t work, so the deal on the table, despite its ugly, politicized origins, is perhaps the best we can do at this point. There is much more at the link, and here is more from Elaine Ou at Bloomberg.
I will be doing a Conversation with Taiwanese Digital Minister Audrey Tang, so what should I ask? Here is Wikipedia with further information. I am looking forward to this one.
I have not applied further indentation:
“…this is seemingly starting to be a big deal in OK, but flying under the radar.
- 10-15 years ago Oklahoma passed a law allowing online-only charter schools with a separate regulatory structure from physical charter schools.
- Critically, the unions did not think to push for an enrollment cap.
- There are 5-10 schools, all quite small, except for one named EPIC.
- Has enrollment (~38,000) that is larger than any district in the state. This enrollment is currently surging faster than its usual high growth because of COVID-19 and could reach 46,000 by the Oct 1 “Money Head Count” deadline.
- From Oct 1, 2018 to Oct 1, 2019, EPIC’s enrollment grew more than the enrollment growth for the entire state of OK.
- Like all public charters in OK, the school is free to attend. Parents get paid $1000 per student per year for school supplies and activities.
- They have 100% online and blended learning options. Teachers in the online-only are paid by how many students they take on and can earn over $100,000. The state average pay for teachers is just over $50,000/yr.
- They are a non-profit but they are run by a closely related for-profit management company that is paid 10% of gross revenue. (Incentives!)
- Everyone in OK education that isn’t EPIC, hates EPIC. The state has multiple lawsuits and audits alleging that they have been committing fraud. These go back as far as 2012 but none have yet been resolved, even with open investigations by the Oklahoma State Bureau of Investigation. The alleged amounts are less than 1% of cumulative revenue.
- An Oklahoma Watch survey from several years ago found that parents were choosing EPIC primarily because they felt their students were falling behind at their districted school, were escaping bullying, or had a desire to pursue other activities i.e. competitive gymnastics.
- On the Oklahoma State Dept. of Education A-F scorecard, EPIC scores better than every traditional Oklahoma City Public Schools and Tulsa Public Schools middle school or high school. It performs roughly near the state average.
- 4-year high school graduation rates are SIGNIFICANTLY lower than traditional schools.
- It seems likely this is because with the online format you cannot graduate without completing assignments on time. There are OKCPS schools that have 1% of students performing at grade level and 95% graduation rates.
- Total Oklahoma K-12 enrollment for 2019-2020 was ~700,000. So EPIC is now over 5% of total state enrollment. They have been growing roughly 50%/year, but that was starting to slow some before the pandemic.
And they are trying to scale gamification of learning:
Like most online education providers, retention has been their weakest point.
Oklahoma schools are required to have each school facility staffed with a certain number of non-teaching positions (librarian, counselor, etc.) so fixed costs are very high. Teacher salaries are usually 35-40% of the budget and are one of the only variable cost centers. Most money is allocated by the state, following the student. EPIC is not far from doing real damage to traditional school finances. This does not seem to be on most people’s radar. It could get more interesting, yet.
There is a new and important and I believe largely true paper from Thomas Astebro, Serguey Braguinsky, and Yuheng Ding:
We document that since 1997, the rate of startup formation has precipitously declined for firms operated by U.S. PhD recipients in science and engineering. These are supposedly the source of some of our best new technological and business opportunities. We link this to an increasing burden of knowledge by documenting a long-term earnings decline by founders, especially less experienced founders, greater work complexity in R&D, and more administrative work. The results suggest that established firms are better positioned to cope with the increasing burden of knowledge, in particular through the design of knowledge hierarchies, explaining why new firm entry has declined for high-tech, high-opportunity startups.
Here is the link.
Who is this guy? How come no one told me about this book until Adam Ozimek asked about it?
One of the main arguments of the book is that we could have had major technological advances in multiple areas if only we had put in another fifty years of hard work on them. Flying cars could have been a thing some time ago!
The author estimates that if quality nanotechnology were up and running, it would take only about a week to rebuild the entire United States. Just imagine how silly the current building permit system would seem then.
The anecdotes on the history of helicopters are interesting and obsessive in a good way.
One of the arguments is simply that we have not much succeeded in boosting our aggregate use of energy. Hall also argues we do not face sufficient challenges, in part because nuclear deterrence has worked so well.
An editor would not approve of the organization and rambling structure of this book, including the lengthy digressions on technologies of the author’s choice and fascination. It does not bother me.
Here is one short bit, not actually representative of the basic style, but I enjoyed it anyway:
If you are a technologist working on some new, clean, abundant form of energy, I wish you all the luck in the world. But you must not labor under the illusion that should you succeed, your efforts will be justly rewarded by the gratitude of the people you have lifted from poverty and enabled to have a bright and growing future. You will be attacked, your work will be lied about by activists, demonized by ignorant journalists, and strangled by regulation.
But only if it works.
You can buy it here, Kindle only for $3.14, note it is a full-length book with all the proper trappings. It’s one of the best and most interesting books on technology in some time, either ignore or enjoy the organizational infelicities, first published in 2018.
In the central African country of Rwanda, single mothers employed at a Japanese eatery have found a new source of income after their jobs took a hit from the novel coronavirus pandemic: babysitting Japanese kids online.
Despite the seven-hour time difference, the cross-cultural service sees women play and sing with children 12,000 kilometers away in Japan via the videoconferencing app Zoom. The mothers will sometimes stream themselves shopping, chopping vegetables and cooking, to the delight of the kids’ parents as well.
The service is provided twice a day for an hour each in a mix of local languages, English, and Japanese.
“There’s a groove that you can’t experience in neighborhood eurythmic classes,” said Toyochika Kamekawa, 36, from Takahama in Fukui Prefecture. His 2-year-old son regularly takes part in the online sessions and sings songs he has been taught, accompanying himself on his toy drum.
The initiative was started up by Rwanda resident Mio Yamada, 38, who hires single mothers to work at her Japanese restaurant in the capital city of Kigali, and her acquaintance Yushi Nakashima, 30.
Yamada, who studied Swahili at university and now has three sons, moved to Rwanda with her husband in 2016 and opened her restaurant the following year.
“I think my son will come to some realization (about the economic disparity between countries) when he’s older and compares his allowance with the sitters’ wages.”
Some of the songs performed by the sitters touch on these darker themes. In one that foreshadows the conflict, the lyrics implore a child to stop crying with the words that when the war begins, they will be given milk from a cow that isn’t sad.
Wanted to let you know that Alec Stapp and I are launching a new blog today called Agglomerations where we’ll be covering a wide range of tech + innovation policy issues.
My first piece today ties to disentangle technology, innovation, and industrial policy, as I feel the conversations there have been quite muddled as of late. I hope you enjoy it.
So what to make of the apparent growing strength of cancel culture and affiliated movements? Here is the fundamental point: With the rise of social media and low-cost communications, virtually everything that can be said, will be said.
It might be said on Twitter rather than on the evening news, or on 4Chan rather than on Facebook. But the sentiments will be out there, and many of them will be disturbing. The world has arrived at a place where just about every politically incorrect statement — and a response to it, not to mention every politically correct statement and a response to that — is published or recorded somewhere.
So the policing of speech may be vastly more common than it was, say, 15 years ago. But the discourse itself is vastly greater in scope. Political correctness has in fact run amok, but so then has everything else.
As a general principle, people notice what disturbs them more than what doesn’t. Therefore opponents of political correctness — and I include myself in this group — have a never-ending supply of anecdotes to be concerned about. I am not suggesting that this cycle will end well, but it does put the matter in perspective.
The issue is how social norms will adjust to cope with a world where everything is being said all the time. That path will not be smooth — but anxiety about it is different from fear of political correctness simply swallowing up everything and canceling everybody.
I’m no optimist. In fact, I suspect it will be harder to rein in the chaos and bewilderment from the say-whatever-you-want culture — have you checked out the pandemic discourse lately? — than to curb the intemperance of the you-can’t-say-that culture.
Consider also the evolution of internet communication. For all of its diversity, there are significant trends toward centralization. The English language is more focal than before, national politics command more attention than local politics, and the U.S. itself has more soft power in some crucial directions, thanks to its central role in the internet’s intellectual infrastructure. It is striking, for example, how much the entire world responded to the Black Lives Matter movement.
That means Americans will be subject to more cancellations and to more political correctness than people in the rest of the world. For better or worse, Americans are the central nexus that so many others are talking about, not always favorably. To quote Joseph Heller: Just because you’re paranoid doesn’t mean they aren’t after you — and Americans have good reason to be paranoid these days. If you published your politically incorrect column in your local Croatian newspaper, the rest of the internet just wouldn’t care all that much.
Yet note the underlying assumption here — namely, that American soft power is indeed growing. And if you are an American intellectual, your relative influence around the world is likely to be growing as well. With that greater influence comes greater scrutiny, and greater risk that you will be treated unfairly by the PC brigades. Is that really such a bad trade-off?
At first I was afraid that “all the wrong people” would like this piece, but so far so good.
Evan Sharp, the co-founder of Pinterest, hired Sacred Design Lab to categorize all major religious practices and think of ways to apply them to the office. They made him a spreadsheet.
“We pulled together hundreds of practices from all these different religions and cultural practices and put them in a spreadsheet and just tried to categorize them by emotional state: which ones are relevant when you’re happy, which are relevant when you’re angry, and a couple other pieces of metadata,” Mr. Sharp said.
When he had the data, he said, he took a few days and read it all. “This sounds embarrassingly basic,” he said, “but it really reframed parts of religion for me.”
It made him realize how many useful tools existed inside something as old-fashioned as his childhood church. “Some of the rituals I grew up with in Protestantism really have emotional utility,” he said. And Mr. Sharp saw that it was good.
Rev. Phillips, the minister, had a few other ideas. She suggested using a repetitive meeting structure, which can be calming for participants. This might take the form of starting each team meeting with the same words, a sort of corporate incantation.
Others suggested workers each light a candle at the start of a meeting, or pick up a common object that everyone is likely to have in their homes.
“How about trying actual religion?” I hear Ross Douthat saying… Here is the full Nellie Bowles NYT article, after a slow start interesting throughout, though no real discussion of Wokeness, which of course is what the tech companies actually are doing.
Yes, the Jason Furman, here is the audio and transcript, please note this was recorded in January. Here is part of the summary:
Jason joined Tyler for a wide-ranging conversation on how monopolies affect investment patterns, his top three recommendations to improve American productivity, why he’s skeptical of place-based development policies, what some pro-immigration arguments get wrong, why he’s more concerned about companies like Facebook and Google than he is Walmart and Amazon, the merits of a human rights approach to privacy, whether the EU treats tech companies fairly, having Matt Damon as a college roommate, the future of fintech, his highest objective when teaching economics, what he learned from coauthoring a paper with someone who disagrees with him, why he’s a prolific Goodreads reviewer, and more.
And here is one excerpt:
COWEN: The US is losing some of its manufacturing capacity, and certainly a lot of its manufacturing workforce. Are there external benefits to keeping those activities more in the US? Significant benefits?
FURMAN: I don’t think that manufacturing itself should be an important objective of US policy. It’s one type of job. It’s been a good type of job, but there’s other good types of jobs as well. I wouldn’t focus on where physical things are being made as opposed to where services are being made. In fact, if anything, I think the error in policy is probably a little bit too much emphasis on manufacturing and a little bit less on services.
COWEN: What do you think of the national security argument? That, say, when building a ship, we might be dependent on South Korean components. If there were a war in Asia, those might be, for some reason, unreliable. We depend on China for rare earths. We depend on Taiwan, to some extent, for high-quality chips, even though we make our own. Is the supply chain extended too long, and it was a kind of economic fantasy, and it doesn’t make national security sense?
FURMAN: I don’t consider myself an expert in any of those national security questions, so I would be open to thinking about the national security concerns associated with the supply chain. I have an awful lot in specific cases — both when I was in government and just in the world more generally — heard people make national security arguments that I found tendentious and pretty unpersuasive.
There may be some that are persuasive and that are true. There’s an awful lot that aren’t. Our administration, towards the end, worried a bit about semiconductors. When I’ve looked at that, there’s enough of a diversified world supply, enough of an ability to scale up if necessary in the United States, that I don’t think on semiconductors — there, it was protectionism under the guise of national security.
So I think we should accept the possibility of national security, take it seriously, but be really, really wary that a lot of protectionist arguments use that trappings.
Economics throughout, with a touch of Dickens. Recommended.
Here is one excerpt:
I’ve moved on from being a researcher. I’m an advisor to Microsoft’s senior leaders about geopolitics and macroeconomics. So, my whole outlook has changed quite a bit as a result of that.
In Taiwan, we’ve come to work extremely closely with Audrey Tang, their digital minister who’s just a remarkable person and, honestly, a much more interesting subject than me. She has been using quadratic voting for administering national hackathons—where people get together and try to create technological solutions to social problems.
Audrey has used quadratic voting to score those competitions and she’s also used another idea that we’re very into, called ‘data coalitions’ or ‘data cooperatives’—they’re sort of data labour unions—to organize those services. Taiwan’s response to Covid was, to a large extent, driven by these civic technology developments and they were the most successful country in the world. They had the lowest infection and death rate and the smallest impact on their economy. A lot of that was related to their harnessing of these civic technology approaches.
Here is the Five Books link, interesting throughout.
Sebastian Garren, to found John Paul II Preparatory School’s South Campus in St. Louis, a hybrid on-line and in-person educational alternative for K-12, also stressing Western history and the classics.
John Durant, for career development and writing, and explorations into notions of angels.
Krishaan Khubchand, 20 years old, studying law at Birkbeck, to study mega-projects and capital allocation, he is also a Progress Studies fellow.
Vignan Velivela. He started as a robotics engineer at Cruise Automation, is a member of the Explorers Club (wiki, BBC) for his work on the lightest planetary rover at Carnegie Mellon, worked on a peer-to-peer lending startup in India that was acqui-hired by PayTm, went to college (BITS Pilani) in India studying EE and Economics, and now is co-founder of AtoB.
Wasteland Ventures (no web page), to support their efforts in talent search and development.
And two Emergent Ventures anti-Covid prizes have been awarded to:
Witold Wiecek, Bayesian statistician and consultant, for his work on the Bayesian modeling of the COVID-19 epidemic, and the design of an optimal vaccine portfolio, in cooperation with the Accelerating Health Technologies team.
Arthur W. Baker, for his efforts on incentive design for vaccines, in cooperation with the Accelerating Health Technologies team.
Here are previous winners of Emergent Ventures grants and prizes.