Results for “solve for equilibrium”
197 found

Mongol

Matt Yglesias offers a good review of this excellent movie, which chronicles the early life of Genghis Khan, or one vision thereof.  There are at least two increasing returns to scale mechanisms in this movie.  First, leadership is focal, which tends to bind groups together and make concentrated rule possible.  Winning battles makes you focal and winning larger battles makes you focal across larger groups.  Second, if you walk or ride alone in the countryside, you will be snatched or plundered.  That causes people to live in settlements and also larger cities.  Put those mechanisms together, solve for equilibrium, and eventually one guy rules a very large kingdom and you get some semblance of free trade.  Sooner or later, that is.  The movie brings you only part of the way there and I believe a sequel is in the works.

The University presidents

Here is three and a half minutes of their testimony before Congress.  Worth a watch, if you haven’t already.  I have viewed some other segments as well, none of them impressive.  I can’t bring myself to sit through the whole thing.

I don’t doubt that I would find their actual views on world affairs highly objectionable, but that is not why I am here today.  Here are a few other points:

1. Their entire testimony is ruled by their lawyers, by their fear that their universities might be sued, and their need to placate internal interest groups.  That is a major problem, in addition to their unwillingness to condemn various forms of rhetoric for violating their codes of conduct.  As Katherine Boyle stated: “This is Rule by HR Department and it gets dark very fast.”

How do you think that affects the quality of their other decisions?  The perceptions and incentives of their subordinates?

2. They are all in a defensive crouch.  None of them are good on TV.  None of them are good in front of Congress.  They have ended up disgracing their universities, in front of massive audiences (the largest they ever will have?), simply for the end goal of maintaining a kind of (illusory?) maximum defensibility for their positions within their universities.  At that they are too skilled.

How do you think that affects the quality of their other decisions?  The perceptions and incentives of their subordinates?

What do you think about the mechanisms that led these particular individuals to be selected for top leadership positions?

3. Not one came close to admitting how hypocritical private university policies are on free speech.  You can call for Intifada but cannot express say various opinions about trans individuals.  Not de facto.  Whether you think they should or not, none of these universities comes close to enforcing “First Amendment standards” for speech, even off-campus speech for their faculty, students, and affiliates.

What do you think that says about the quality and forthrightness of their other decisions?  Of the subsequent perceptions and incentives of their subordinates?

What do you think about the mechanisms that led this particular equilibrium to evolve?

Overall this was a dark day for American higher education.  I want you to keep in mind that the incentives you saw on display rule so many other parts of the system, albeit usually invisibly.  Don’t forget that.  These university presidents have solved for what they think is the equilibrium, and it ain’t pretty.

Monday assorted links

1. That was then, this is now, railway compartment edition.

2. Harriet Taylor is underrated.

3. “My data show that nearly half of my study participants report meaningful and regular interactions with deceased relatives and friends who were important in their lives.” — solve for the AI equilibrium.

4. Yet another paper showing that the evidence for YouTube radicalization is weak.

5. Russ Roberts Substack on current life in Israel.

6. Patrick O’Shaughnessy interview John and Patrick Collison.

Israel’s previous game-theoretic strategy?

Israel’s asymmetric response is supposed to serve a deterrent purpose, Byman told Vox, but the country has also, at least in the past, had a vested interest in keeping Hamas in power. According to a 2017 research brief by the RAND corporation, Israel has the military capability to wipe out Hamas, but doing so could perhaps be even riskier than not, given that an even more extreme organization could come into power — or that Israel could be put into the position of governing the territory itself. “As such, Israel’s grand strategy became ‘mowing the grass’ — accepting its inability to permanently solve the problem and instead repeatedly targeting leadership of Palestinian militant organizations to keep violence manageable.”

“We want to break their bones without putting them in the hospital,” one Israeli defense analyst told the research brief’s authors.

Here is more from Ellen Ioanes.  Viewed through this lens, it is far from obvious what is the new equilibrium…?  And here is some background context from the still-underrated Thomas Friedman.

Friday assorted links

1. “But when Seema Ghulam Haider, 27, a married Pakistani Muslim, sneaked into India with her four children to be with Sachin Meena, 22, a Hindu man, their time together was brief.” (NYT)

2. John Coltrane in Italian.

3. “Many people with hoarding tendencies never face intervention.

4. New Tablet podcast with Walter Russell Mead.

5. Libertarianism as a warning system.

6. “When leaders in the shrinking Alaskan fishing village of Karluk made a plea on social media asking two families with three to four children each to move to the Last Frontier state to save their cherished school, they did not expect thousands of responses to pour in.

7. Solve for the San Francisco self-driving taxi equilibrium.

The dilemma of 2023 banking, in a nutshell

Motivated by the regional bank crisis of 2023, we model the impact of interest rates on the liquidity risk of banks. Prior work shows that banks hedge the interest rate risk of their assets with their deposit franchise: when interest rates rise, the value of the assets falls but the value of the deposit franchise rises. Yet the deposit franchise is only valuable if depositors remain in the bank. This creates run incentives for uninsured depositors. We show that a run equilibrium is absent at low interest rates but appears when rates rise because the deposit franchise comes to dominate the value of the bank. The liquidity risk of the bank thus increases with interest rates. We provide a formula for the bank’s optimal risk management policy. The bank should act as if its deposit rate is more sensitive to market rates than it really is, i.e., as if its “deposit beta” is higher. This leads the bank to shrink the duration of its assets. Shortening duration has a downside, however: it exposes the bank to insolvency if interest rates fall. The bank thus faces a dilemma: it cannot simultaneously hedge its interest rate risk and liquidity risk exposures. The dilemma disappears only if uninsured deposits do not contribute to the deposit franchise (if they have a deposit beta of one). The recent growth of low-beta uninsured checking and savings accounts thus poses stability risks to banks. The risks increase with interest rates and are amplified by other exposures such as credit risk. We show how they can be addressed with an optimal capital requirement that rises with interest rates.

That is from a new paper by Itamar Drechsler, Alexi Savov, Philipp Schnabl, and Olivier Wang.

Sunday assorted links

1. Game-theoretic analysis of China blockading Taiwan.

2. Pentagon official offers new UFO theory (not my theory, to be clear).

3. “How did the men, whom the authorities are still working to identify and arrest, lug so many dimes into their white Chrysler 300 and dark-colored pickup truck?”  (200k, NYT)  And problems with prompt injection.

4. Solve for the equilibrium.

5. Chess boom in American schools?

6. Plastic windows for Ukraine?

EA, AI, and the rationality community

More broadly, I think AI Alignment ideas/the EA community/the rationality community played a pretty substantial role in the founding of the three leading AGI labs (Deepmind, OpenAI, Anthropic), and man, I sure would feel better about a world where none of these would exist, though I also feel quite uncertain here. But it does sure feel like we had a quite large counterfactual effect on AI timelines.

That is from “habryka, Ben Pace” on LessWrong blog.  As you might expect, I would give those comments a different valence, nonetheless they are insightful.  Here are my points:

1. It is truly remarkable how much influence the cited movements have had.  Whether or not you agree in full (or at all), this should be recognized and respected.  Kudos to them!  And remember, so often ideas lie behind technology.

2. Anthropic has announced a raise of $5 billion and is promoting its intention to compete with Open AI and indeed outdo them.  The concept “Solve for the equilibrium” should rise in status.

3. You cannot separate “interest in funding AI safety” (which I am all for) from “AI progress.”  That by now should be obvious.  No progress, no real interest in safety issues.

4. To this day, the Doomsters are de facto the greatest accelerationists.  Have you noticed how the Democrats (or Republicans) “own” certain political issues?  For instance, voters trust the Democrats more with Social Security, and the mere mention of the topic helps them, even if a Republican has a good point to make.  Well, the national security establishment “owns” the ideas of existential risk and risk from foreign powers.  The more you talk about doomsday issues, the more AI risk gets slotted into their purview, for better or worse.  And they ain’t Brussels (thank goodness).  To the extent the Doomsters have impact, their net effect will be to place the national security types in charge, or at least to raise their influence.  And how do they think that is going to work out (on their own terms)?  Perhaps they would do better to focus on mundane copyright and libel issues with LLMs, but that is not their nature.

The Government Conspiracy Against Crypto

A sharply worded whitepaper from law firm Cooper and Kirk accuses regulators at the FDIC and the FED of an illegal and unconstitutional attack on crypto done without cover of law or Congressional approval. Cooper and Kirk are one of the most powerful and influential law firms in Washington. The firm’s attorneys have frequently appeared before the Supreme Court and as of 2021 “six former interns or associates of Cooper & Kirk [were] serving as U.S. Supreme Court clerks.” So this broadside isn’t coming from an obscure and unconnected law firm:

Recent stories in the financial press have uncovered a coordinated campaign by prudential bank regulators to drive crypto businesses out of the financial system. Bank regulators have published informal guidance documents that single out cryptocurrency and cryptocurrency customers as a risk to the banking system. Businesses in the cryptocurrency marketplace are losing their bank accounts, or their access to the ACH network, suddenly, and with no explanation from their bankers. The owners and employees of cryptocurrency firms are even having their personal accounts closed without explanation. And over the past two weeks, federal regulators have shut down a solvent bank that was known to be serving the crypto industry and, although it is required to resolve banks through the “least cost resolution” to the Deposit Insurance Fund, the FDIC chose to shutter rather than sell the part of the bank that serves digital asset customers, costing the Fund billions of dollars.

This pattern of events is not random, and we have seen it before. This is not the first time that federal bank regulators, working with their State-level counterparts, have abused their supervisory authority to label businesses unworthy of having a bank account and worked in secret to purge disfavored lines of commerce from the financial system. Beginning in 2012, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, and the Board of Governors of the Federal Reserve System carried out a coordinated campaign to weaponize the banks against industries that had fallen out of favor with the administration—including gun stores, pawn shops, tobacco stores, payday lenders, and a host of other brick and mortar businesses. That campaign was called Operation Choke Point.

Our firm successfully challenged Operation Choke Point, and it was brought to a halt. The current bout of regulatory overreach against the crypto industry is illegal for much the same as reason as its predecessor. Specifically:

• Operation Choke Point 2.0 deprives business of their constitutional rights to due process in violation of the Fifth Amendment. It is well settled that when a federal agency attaches a derogatory label to an individual or business, and this stigmatizing label causes the business to lose a bank account or broadly precludes them from the pursuit of their chosen trade, the agency has violated the Due Process Clause of the Fifth Amendment, unless if first afforded the individual or business a right to be heard. This is precisely what the federal bank regulators responsible for Operation Choke Point 2.0 have done and continue to do by labeling crypto businesses a threat to the financial system, a source of fraud and misinformation, and a risk to bank liquidity.

• Operation Choke Point 2.0 violates both the non-delegation doctrine and the anticommandeering doctrine, depriving Americans of key structural constitutional protections against the arbitrary exercise of governmental power.

• By leveraging their authority over the banks to acquire the power to pick and choose the customers whom the banks may serve, the bank regulators have exceeded their statutory authority. The bank regulators are charged with supervising the safety and soundness of the banks; their effort to anoint themselves the gatekeepers of the financial system and the ultimate arbiters of American innovation and American economic life cannot be permitted to stand.

• The federal bank regulators are also refusing to perform their non-discretionary duties when doing so will benefit the cryptocurrency industry. State banks that are statutorily entitled to access the federal reserve system are being denied their rights solely because they serve the crypto industry. The federal bank regulators are not free to pick and choose which statutory obligations they duties they wish to perform.

• The federal bank regulators are evading the notice and comment rulemaking requirements of the administrative procedure act by imposing binding requirements on the banking industry through informal guidance documents. This is undemocratic, since it deprives the public of the right to comment on proposed rules, and it also runs contrary to the principle of judicial review, since courts lack the power to review “informal” agency actions.

• Finally, the federal bank regulators are acting in an arbitrary and capricious fashion by failing to adequately explain their decisions, by failing to engage in reasoned decision making, and by failing to treat like cases alike. It is difficult to imagine a more arbitrary and capricious agency action than simultaneously placing a solvent bank into receivership solely because it provided financial services to the crypto industry, while permitting insolvent institutions not tied to the crypto industry to continue operating.

…The persistent unwillingness of the nation’s bank regulators to follow the law and obey the Constitution calls out for Congressional action. Cracks are starting to form in the American financial system as its regulators increasingly abuse their power to achieve aims outside their authority and beyond their competence….We therefore urge Congress to perform its oversight role and hold these agencies to account.

I agree that financial regulation has been employed unconstitutionally, illegally, and covertly to control and regulate economic activity. One of my big fears is that a Central Bank Digital Currency would render nearly every transaction in the entire economy legible and primed for government monitoring and control. Thus, it is crucial to uncover, understand and debate the clandestine nature of financial regulation before the urgency of crisis is used to push us into an undesirable new equilibrium that will be difficult to escape.

Read the whole thing.

Yes, the Chinese Great Firewall will be collapsing

As framed from China:

Fang Bingxing, considered the father of China’s Great Firewall, has raised concerns over GPT-4, warning that it could lead to an “information cocoon” as the generative artificial intelligence (AI) service can provide answers to everything.

Fang said the rise of generative AI tools like ChatGPT, developed by Microsoft-backed OpenAI and now released as the more powerful ChatGPT-4 version, pose a big challenge to governments around the world, according to an interview published on Thursday by Red Star News, a media affiliate to state-backed Chengdu Economic Daily.

“People’s perspectives can be manipulated as they seek all kinds of answers from AI,” he was quoted as saying.

Fang, a computer scientist and former government official, is widely considered the chief designer of China’s notorious internet censorship and surveillance system. He played a key role in creating and developing the Great Firewall, a sophisticated system of internet filters and blocks that allows the Chinese government to control what its citizens can access online.

I would put it differently, but I think he understands the point correctly.  Here is more from SCMP, via D.  The practical value of LLMs is high enough that it will induce Chinese to seek out the best systems, and they will not be censored by China.  (Oddly, some of us might be seeking out the Chinese LLM too!)  Furthermore, once good LLMs can be trained on a single GPU and held on a phone…

Solve for the political equilibrium.

Why was I bored by the Twitter files?

I mentioned that a short while ago, and a few people wrote and asked me to explain.  The answer is simple: I have the Vietnam War and Pentagon Papers as formative political memories.  In those days, it was simply taken for granted that the government twisted the arm of news media.  It also never stopped, and “government” and “CEOs” talk to each other all the more these days.  Solve for the equilibrium, and thereby you also can learn how it is so hard to stop.  To be clear, I am quite against such interference with the media, outside of a few well-specified cases (“please don’t report where the troops are massing for D-Day,” and so on.)  On any gray area I am going to side against the government, if only for slippery slope reasons.  By its nature such communications are inevitably coercive, even if a transcript of them might sound entirely friendly and non-threatening.  There was a paranoia to those earlier times (ever watch the Coppola/Gene Hackman movie The Conversation?) that turned out to be justified.

If you have been “pilled” on this issue by Elon and the discovery process, great.  But for me it was like reading about waste inside the Pentagon…

Wednesday assorted links

1. Massachusetts markets in everything?

2. When a class is turned into a dating device.  Solve for the equilibrium.

3. Start-up seeks to simplify and speed up drug trials (NYT).

4. Watch planets in orbit around another star.

5. Now that we have a longer-run perspective, it is worth reexamining the myth of austerity in the UK.  Oh, how people got this one wrong!  They really did think it was just a cyclical story, but now we know better.  Mea culpas will not be forthcoming, I predict.  It is worth revisiting my 2012 post on this topic.  So many people got this so dogmatically so very, very wrong.

6. California cities to lose many of their zoning powers.

7. Missing radioactive capsule found in Australian outback.

How AI will change everything on the internet

That is the topic of my latest Bloomberg column, Washington Post reprint here, and yes people this is for real.  Here is one excerpt:

Change is coming. Consider Twitter, which I use each morning to gather information about the world. Less than two years from now, maybe I will speak into my computer, outline my topics of interest, and somebody’s version of AI will spit back to me a kind of Twitter remix, in a readable format and tailored to my needs.

The AI also will be not only responsive but active. Maybe it will tell me, “Today you really do need to read about Russia and changes in the UK government.” Or I might say, “More serendipity today, please,” and that wish would be granted.

I also could ask, “What are my friends up to?” and I would receive a useful digest of web and social media services. Or I could ask the AI for content in a variety of foreign languages, all impeccably translated. Very often you won’t use Google, you will just ask your question to the AI and receive an answer, in audio form for your commute if you like. If your friends were especially interested in some video clips or passages from news stories, those might be more likely to be sent to you.

In short, many of the current core internet services will be intermediated by AI. This will create a fundamentally new kind of user experience.

It is unlikely that the underlying services will vanish. People will still Google things, and people will still read and write on their Facebook pages. But more will move directly to the AI aggregator. This dynamic is already happening: When was the last time you asked Google for directions? They exist online, of course, but if you’re like me, you just use Google maps and GPS directly. You have in effect moved to the information aggregator.

Or consider blogs, which arguably peaked between 2001 and 2012. Then Twitter and Facebook became aggregators of blog content. Blogs are still numerous, but many people get access to them directly through aggregators. Now that process is going to take another step — because the current aggregators will themselves be aggregated and organized, by super-smart forms of machine intelligence.

The world of ideas will be turned upside down. Many public intellectuals excel at promoting themselves on Twitter and other social media, and those opportunities may diminish. There will be a new skill — promoting oneself to the AI — of a still unknown nature.

Of course there is more at the links above.  I could have written a much longer column of course.  Just imagine asking the service of your choice for “a Tyler take” or “an Alex take.”  Solve for the whole equilibrium!  Many more institutions are aggregators than you might at first think…