Results for “age of em” 17233 found
Instructor value-added in higher education
On average, moving to a 1 standard deviation better instructor would increase a student’s next semester GPA by 0.13 points, and earnings six years after college entry by 17%. Strikingly, value-added is only weakly correlated with student evaluations. An instructor retention policy based on value-added would result in 2.7% higher earnings for students attending Texas universities.
That is from a new job market paper by Merrill Warnick, Jacob Light, and Anthony Yim from Stanford. Here is Warnick’s job market portfolio.
Are sports bettors overly optimistic?
Corrective policy in sports betting markets is motivated by concerns that demand may be distorted by behavioral bias. We conduct a field experiment with frequent sports bettors to measure the impact of two biases, overoptimism about financial returns and self-control problems, on the demand for sports betting. We find widespread overoptimism about financial returns. The average participant predicts that they will break even, but in fact loses 7.5 cents for every dollar wagered. We also find evidence of significant self-control problems, though these are smaller than overoptimism. We estimate a model of biased betting and use it to evaluate several corrective policies. Our estimates imply that the surplus-maximizing corrective excise tax on sports betting is twice as large as prevailing tax rates. We estimate substantial heterogeneity in bias across bettors, which implies that targeted interventions that directly eliminate bias could improve on a tax. However, eliminating bias is challenging: we show that two bias-correction interventions favored by the gambling industry are not effective.
That is from a new paper by Matthew Brown, Nick Grasley, and Mariana Guido. Matthew Brown is a job market candidate from Stanford, and has a very interesting broader portfolio.
I do not, by the way, favor a ban on sports betting, but it is worth asking, when appropriate, what is the utilitarian cost of one’s libertarianism. On this particular issue, I would say “rising!”
Wednesday assorted links
1. “The study shows that users with many more criminal verdicts, more time spent in foster care, better primary school grades, and higher childhood socioeconomic status are more hostile on social media, in part, because such factors predict online engagement in political discussions, which is a major correlate of hostility.” Link here.
2. Is annoyance the essence of love?
3. Mark Skousen on Gross Output and national income accounting.
5. “…the paper also describes seven pragmatic near-term reforms to promote anti-aging medicines.”
6. Daniel Ellsberg was a consistent doomster, made no excuses.
New report on nuclear risk
Phil Tetlock is part of the study, from the Forecasting Research Institute. Obviously this is very importnt. From Tetlock’s email to me:
“In brief, this study is the largest systematic survey of subject matter experts on the risk posed by nuclear weapons. Through a combination of expert interviews and surveys, 110 domain experts and 41 experienced forecasters predicted the likelihood of nuclear conflict, explained the mechanisms underlying their predictions, and forecasted the impact of specific tractable policies on the likelihood of nuclear catastrophe.
Key findings include:
- We asked experts about the probability of a nuclear catastrophe (defined as an event where nuclear weapons cause the death of at least 10 million people) by 2045, the centenary of the bombings of Hiroshima and Nagasaki. Experts assigned a median 4.5% probability of a nuclear catastrophe by 2045, while experienced forecasters put the probability at 1%.
a. Respondents thought that a nuclear conflict between Russia and NATO/USA was the adversarial domain most likely to be the cause of a nuclear catastrophe of this scale, however risk was dispersed relatively evenly among the other adversarial domains we asked about: China/USA, North Korea/South Korea, India/Pakistan, and Israel/Iran.
- We asked participants about their beliefs on the likely effectiveness of several policy options aimed at reducing the risk of a nuclear catastrophe. Two policies emerged as clear favorites for most participants: a crisis communications network and nuclear-armed states implementing failsafe reviews. The median expert thought that a crisis communications network would reduce the risk of a nuclear catastrophe by 25%, and failsafe reviews would reduce it by 20%.”
You will find the report here.
Monday assorted links
Principles of Economics Textbooks and the Market for Ice Cream
Rey Hernández-Julián and Frank Limehouse writing in the Journal of Economics Teaching write that very few principles of economics textbooks deal with modern information and digital tech industries:
The main takeaways of our review are highlighted by two stand-alone textboxes found in Mankiw’s (2023) textbook. This textbook has been regarded as one of the most dominant players in the principles of economics textbook market for over 20 years. In the introductory chapter of the 10th Edition (2023), “Ten Principles of Economics” there is a stand-alone textbox with the Netflix logo with the following caption: “Many movie streaming services set the marginal cost of a movie equal to zero”. However, there is no further explanation of this statement in the chapter and no presentation of the concept of zero marginal cost pricing in the remainder of the entire textbook. In Chapter 2 (“Thinking Like an Economist”), there is an In the News article from the New York Times, “Why Tech Companies Hire Economists”, but very little coverage in the text on how to apply microeconomic concepts to the tech industry. These two discussions of the tech industry in Mankiw’s text exemplify many of our findings from other texts….updated examples from the modern economy seem to be afterthoughts and detached from the central discussion of the text.
…There are some notable exceptions. The most significant coverage of these questions is in Chapter 16 of Cowen and Tabarrok’s Modern Principles of Microeconomics, 5th edition (2021). In this chapter, the authors discuss platform service providers, such as Facebook, Amazon, Google, Visa, and Uber, and the role they play in competing “for the market,” instead of “in the market.” They also discuss why the prevailing product is not necessarily the best one, how music is a network good, and why these platform services may give away goods for ‘free’.
I would also point out that our example of a constant-cost industry (flat long-run supply curve) is domain name registration! As we write in Modern Principles:
Now consider what happens when the demand for domain names increases. In 2005, there were more than 60 million domain names. Just one year later, as the Internet exploded in popularity, there were more than 100 million domain names. If the demand for oil nearly doubled, the price of oil would rise dramatically, but despite nearly doubling in size, the price of registering a domain name did not increase…the expansion of old firms and the entry of new firms quickly pushed the price back down to average cost.
In short, it’s called Modern Principles for a reason! Tyler and I are committed to keeping up with the times and not just adding the occasional box and resting on our laurels.
See Hernández-Julián and Limehouse for some further examples of how to introduce modern industries into principles of economics.
Effective Altruists and finance theory
One of the most admirable and impressive things about the EA movement is how many people in it will avidly learn about other areas. Whether it be animal welfare, mosquite bed nets, asteroid risk, or the properties of various AI programs, you can find numerous EAs who really have gone out of their way to master many of the details.
They don’t quite acquire expert knowledge, but due to their general facility in the application of reason, often they can outargue the experts themselves.
Yet one thing I have never met — ever — or seen on Twitter, is an EA who understands finance at a comparable level. Never.
And that is odd, because EAs so stress the import of probabilistic thinking.
If you pose the “have you thought through being short the market?” question, one hears a variety of answers that are what I call “first-order wrong.” That is, there may well be more sophisticated defenses of those points of view, but you just hear the first-order response, designed to dispose of the question without much further thought. A few of those responses are:
1. “Why should I have to gamble?” (Given your other views, it is hedging not gambling)
2. “There is already evidence I am right. My friends and I made a lot of money buying Nvidia stock.”
3. “I don’t know how to short the market.” Or “Amateur investors shoulnd’t short the market!”
4. “Did the stock market predict Hitler and WWII?”
5. “How possibly can I cash in if the world ends very suddenly? After all, the AGI has an incentive to deceive us.”
6. “But I don’t know when the world is going to end!”
7. “Why should I short the market when I can earn so much more going long on Nvidia!?”
8. “Well, I am not buying stocks!”
9. “If the world is ending soon, what do I need money for?”
10. “But if the world doesn’t end, things will be really great.”
And more. (I’ve even heard “Are you short the market?”) I will leave it as an exercise to the reader to work out what is wrong with these responses. In most cases o1 and Claude can come to your aid, if needed.
I do believe that Aella, for one, is in essence short the market. Good for her, as she is also pessimistic about AI. But here are two responses I have never ever heard, not once:
11. “I’m going to sit down and study finance and see if I can find a feasible way to short the market. If I can’t I will feel sad, but I might get back to you for further guidance.”
12. “Soon enough, AI will be good enough to tell me how to short the market intelligently. Then I am going to do this — thanks for the tip! ”
Nope never. The absence of the last one from the discourse I find especially odd. “AGI will be powerful enough to destroy us, but not good enough to help me do an effective short!” OK…
The sociology here is more indicative of what is going on than the arguments themselves. Because the EAs, rationality types, and doomsters here generally are very good at learning new things.
Of course, once shorting the market even enters serious contemplation (never mind actually doing it), you also start seeing current market prices as a kind of testing referendum on various doomster predictions. And suffice to say, market prices basically offer zero support for all of those predictions. And that is embarrassing, whether you should end up shorting the market or not. Many EAs and rationality types are also fans of prediction markets in other contexts.
I nonetheless would urge many EA, rationality, and AI doomster types to learn more basic finance. It can liberate you from various mental chains, and it will be useful for the rest of your life, no matter how long or short that may be.
Addendum: So, so many fallacies in the comments. Here is one brief response I wrote: “Just keep on buying puts with a small pct. of your wealth. You don’t have to use leverage, though of course a real pessimist should. What is hard about shorting is that the world isn’t in fact going to end! You are smuggling in categories from very different contexts. And none of this requires anything remotely like a “strong version of market efficiency.” It does require that the end of world is bearish for prices at some point! [once people recognize doom might be coming, not when doom finally arrives]”
What should I ask Paula Byrne?
Paula Jayne Byrne, Lady Bate…is a British biographer, novelist, and literary critic.
Byrne has a PhD in English literature from the University of Liverpool, where she also studied for her MA, having completed a BA in English and Theology at West Sussex Institute of Higher Education (now Chichester University).
Byrne is the founder and chief executive of a small charitable foundation, ReLit: The Bibliotherapy Foundation, dedicated to the promotion of literature as a complementary therapy in the toolkit of medical practitioners dealing with stress, anxiety and other mental health conditions. She is also a practicing psychotherapist, specializing in couples and family counseling.
Byrne, who is from a large working-class Roman Catholic family in Birkenhead, is married to Sir Jonathan Bate, Shakespeare scholar and former Provost of Worcester College, Oxford
Her books cover Jane Austen, Mary Robinson, Evelyn Waugh, Barbara Pym, JFK’s sister, two novels, and her latest is a study of Thomas Hardy’s women, both in his life and in his fiction, namely Hardy’s Women: Mother, Sister, Wives, Muses. Here is her home page. Here is Paula on Twitter.
Scott Alexander on the Progress Studies conference
Here is one excerpt:
Over-regulation was the enemy at many presentations, but this wasn’t a libertarian conference. Everyone agreed that safety, quality, the environment, etc, were important and should be regulated for. They just thought existing regulations were colossally stupid, so much so that they made everything worse including safety, the environment, etc. With enough political will, it would be easy to draft regulations that improved innovation, price, safety, the environment, and everything else.
For example, consider supersonic flight. Supersonic aircraft create “sonic booms”, minor explosions that rattle windows and disturb people underneath their path. Annoyed with these booms, Congress banned supersonic flight over land in 1973. Now we’ve invented better aircraft whose booms are barely noticeable, or not noticeable at all. But because Congress banned supersonic flight – rather than sonic booms themselves – we’re stuck with normal boring 6-hour coast-to-coast flights. If aircraft progress had continued at the same rate it was going before the supersonic ban, we’d be up to 2,500 mph now (coast-to-coast in ~2 hours). Can Congress change the regulation so it bans booms and not speed? Yes, but Congress is busy, and doing it through the FAA and other agencies would take 10-15 years of environmental impact reports.
Or consider solar power. The average large solar project is delayed 5-10 years by bureaucracy. Part of the problem is NEPA, the infamous environmental protection law saying that anyone can sue any project for any reason if they object on environmental grounds. If a fossil fuel company worries about a competition from solar, they can sue upcoming solar plants on the grounds that some ants might get crushed beneath the solar panels; even in the best-case where the solar company fights and wins, they’ve suffered years of delay and lost millions of dollars. Meanwhile, fossil fuel companies have it easier; they’ve had good lobbyists for decades, and accrued a nice collection of formal and informal NEPA exemptions.
Even if a solar project survives court challenges, it has to get connected to the grid. This poses its own layer of bureaucracy and potential pitfalls.
Do read the whole thing. And congratulations to Jason Crawford and Heike Larson for pulling off this event.
Risers and Fallers, mostly Fallers
Here is a fun post by Arnold Kling on which thinkers have kept name recognition and also influence. Excerpt:
Sociology (Erving Goffman, Talcott Parsons, Robert Nisbet, Charles Murray, Matt Granovetter, Robert Trivers, E.O. Wilson, Richard Dawkins, Stephen Jay Gould)
Is there not a good case to be made that we are living in Erving Goffman’s world? I think he coined the term “impression management,” and certainly with the advent of social media that is now a big part of our lives. But he is a Faller. Probably if you would read him now, you would dismiss him as offering Blinding Glimpses of the Obvious. Parsons and Nisbet are also Fallers.
Murray is still polarizing, but much lesser known than he was in the 20th century. So he is a Faller, but too much of one.
Granovetter is a Riser, no? Social networks are a big deal now, and he is known for his work on those.
I put the sociobiology controversialists in the sociology category, since the public doesn’t care about insects or peacocks. I would say that Gould’s crusade against evolutionary biology failed, so he seems to be somewhat of a Faller. Dawkins and Trivers seem like Risers, but Wilson was much more well known, and controversial, in his prime.
Keynes, Tolkien, and Rand are among the risers (sometimes relatively speaking), so what does that tell us about the current world?
Metascience podcast on science and safety
From the Institute for Progress. There are four of us, namely Dylan Matthews, Matt Clancy, and Jacob Trefethen as well. There is a transcript, and here is one very brief excerpt:
Tyler Cowen: I see the longer run risks of economic growth as primarily centered around warfare. There is lots of literature on the Industrial Revolution. People were displaced. Some parts of the country did worse. Those are a bit overstated.
But the more productive power you have, you can quite easily – and almost always do – have more destructive power. The next time there’s a major war, which could be many decades later, more people will be killed, there’ll be higher risks, more political disorder. That’s the other end of the balance sheet. Now, you always hope that the next time we go through this we’ll do a better job. We all hope that, but I don’t know.
And:
Tyler Cowen: But the puzzle is why we don’t have more terror attacks than we do, right? You could imagine people dumping basic poisons into the reservoir or showing up at suburban shopping malls with submachine guns, but it really doesn’t happen much. I’m not sure what the binding constraint is, but since I don’t think it’s science, that’s one factor that makes me more optimistic than many other people in this area.
Dylan Matthews: I’m curious what people’s theories are, since I often think of things that seem like they would have a lot of potential for terrorist attacks. I don’t Google them because after Edward Snowden, that doesn’t seem safe.
I live in DC, and I keep seeing large groups of very powerful people. I ask myself, “Why does everyone feel so safe? Why, given the current state of things, do we not see much more of this?” Tyler, you said you didn’t know what the binding constraint was. Jacob, do you have a theory about what the binding constraint is?
Jacob Trefethen: I don’t think I have a theory that explains the basis.
Tyler Cowen: Management would be mine. For instance, it’d be weird if the greatest risk of GPT models was that they helped terrorists have better management, just giving them basic management tips like those you would get out of a very cheap best-selling management book. That’s my best guess.
I would note that this was recorded some while ago, and on some of the AI safety issues I would put things differently now. Maybe some of that is having changed my mind, but most of all I simply would present the points in a very different context.
Quantitative Economics with Deep Learning
We argue that deep learning provides a promising avenue for taming the curse of dimensionality in quantitative economics. We begin by exploring the unique challenges posed by solving dynamic equilibrium models, especially the feedback loop between individual agents’ decisions and the aggregate consistency conditions required by equilibrium. Following this, we introduce deep neural networks and demonstrate their application by solving the stochastic neoclassical growth model. Next, we compare deep neural networks with traditional solution methods in quantitative economics. We conclude with a survey of neural network applications in quantitative economics and offer reasons for cautious optimism.
That is from a new paper by Jesús Fernández-Villaverde, Galo Nuño, and Jesse Perla.
The MR Podcast–Oil Shocks, Price Controls and War
Our second podcast on the 1970s titled Oil Shocks, Price Controls and War is now available! Here’s one bit:
Tabarrok: …Sheikh Ahmed Yamani, in a famous statement, he was the oil minister for the Kingdom of Saudi Arabia, he’s a leader of OPEC, he says on October 16th, this is 10 days after the war begins, “This is a moment for which I have been waiting for a long time. The moment has come. We are masters of our own commodity.” They raise the price of oil. Oil production falls by about 9 percent to 10 percent. That doesn’t seem on the surface to be a huge amount, but it reveals something which people had not been prepared for, and that was the inelasticity of oil demand.
I would put it this way. I think this is the key idea here. Almost accidentally, the exporting countries had discovered that the demand for oil was more inelastic than anyone had ever realized. The main lesson they drew before 1973, the oil exporting countries thought that the only way to increase revenues was to produce more. After 1973, they learned that an even better way to increase revenues was to produce less.
Here’s another:
COWEN: Since the 1980s, economists, for a number of reasons, have underrated real shocks as a source of business cycles and downturns. You have the Keynesians who didn’t want to talk about it, and then you had the Monetarists, Milton Friedman, who wanted to promote their own recipe, and people just stopped talking about it. Even 2008, which clearly had a lot to do with a major negative shock to aggregate demand, but the price of oil is quite high at the time when that’s breaking, and it was a major factor behind the downturn.
TABARROK: Absolutely.
COWEN: No one wants to talk about that.
Here is the MR Podcast home page. Subscribe now to take a small step toward a much better world: Apple Podcasts | Spotify | YouTube.
What predicts success in science?
How does a person’s childhood socioeconomic status (SES) influence their chances to participate and succeed in science? To investigate this question, we use machine-learning methods to link scientists in a comprehensive biographical dictionary, the American Men of Science (1921), with their childhood home in the US Census and with publications. First, we show that children from low-SES homes were already severely underrepresented in the early 1900s. Second, we find that SES influences peer recognition, even conditional on participation: Scientists from high-SES families have 38% higher odds of becoming stars, controlling for age, publications, and disciplines. Using live-in servants as an alternative measure for SES confirms the strong link between childhood SES and becoming a star. Applying text analysis to assign scientists to disciplines, we find that mathematics is the only discipline in which SES influences stardom through the number and the quality of a scientist’s publications. Using detailed data on job titles to distinguish academic from industry scientists, we find that industry scientists have lower odds of being stars. Controlling for industry employment further strengthens the link between childhood SES and stardom. Elite undergraduate degrees explain more of the correlation between SES and stardom than any other control. At the same time, controls for birth order, family size, foreign-born parents, maternal education, patents, and connections with existing stars leave estimates unchanged, highlighting the importance of SES.
That is from a new NBER working paper by Anna Airoldi and Petra Moser.
A funny feature of the AI doomster argument
If you ask them whether they are short the market, many will say there is no way to short the apocalypse. But of course you can benefit from pending signs of deterioration in advance. At the very least, you can short some markets, or go long volatility, and then send those profits to Somalia to mitigate suffering for a few years before the whole world ends.
Still, in a recent informal debate at the wonderful Roots of Progress conference in Berkeley, many of the doomsters insisted to me that “the end” will come as a complete surprise, given the (supposed) deceptive abilities of AGI.
But note what they are saying. If markets will not fall at least partially in advance, they are saying the passage of time, and the events along the way, will not persuade anyone. They are saying that further contemplation of their arguments will not persuade any marginal investors, whether directly or indirectly. They are predicting that their own ideas will not spread any further.
I take those as signs of a pretty weak argument. “It will never get more persuasive than it is right now!” “There’s only so much evidence for my argument, and never any more!” Of course, by now most intelligent North Americans with an interest in these issues have heard these arguments and they are most decidedly not persuaded.
There is also a funny epistemic angle here. If the next say twenty years of evidence and argumentation are not going to persuade anyone else at the margin, why should you be holding this view right now? What is it that you know, that is so resistant to spread and persuasion over the course of the next twenty years?
I would say that to ask such questions is to answer them.