Results for “age of em” 15649 found
The public choice economics of crisis management
Why don’t governments handle all crises well? Read Brad DeLong’s catalog of charges on Katrina. I can think of a few systematic reasons for institutional failure:
1. The event is often small-probability in nature.
2. The event has very negative consequences, and we don’t have optimal punishments for those who get it wrong.
3. Many crisis-related events and required decisions happen quickly in immediate sequence. First, it is hard to get the decisions right, second it is even harder to look good, given some inevitable mistakes.
4. Media scrutiny is intense, and voters care about the issue. This encourages ex post overreactions and overinvestments in symbolic fixes, especially when combined with #1.
5. A crisis is, by definition, large. This puts federalism, whatever its other merits, at a disadvantage. No one is sure who is responsible for what, or how a chain of command should operate.
All of these seem to have operated in New Orleans, plus they were combined with one of our worst-functioning local governments and an administration especially weak on the issue of accountability. My colleague Roger Congleton has a paper on the public choice of crisis management. This is an underexplored topic, so feel free to suggest other readings in the comments.
Time management tips
John Quiggin offers some time management tips over at CrookedTimber.org. I’ll second his call for a daily "word quota", but express horror at his notion that you should ever devote a morning to "8-10 jobs that ought to take 5 minutes each."
Here are my suggestions:
1. There is always time to do more, most people, even the productive, have a day that is at least forty percent slack.
2. Do the most important things first in the day and don’t let anybody stop you. Estimate "most important" using a zero discount rate. Don’t make exceptions. The hours from 7 to 12 are your time to build for the future before the world descends on you.
3. Some tasks (drawing up outlines?) expand or contract to fill the time you give them. Shove all these into times when you are pressed to do something else very soon.
4. Each day stop writing just a bit before you have said everything you want to. Better to approach your next writing day "hungry" than to feel "written out." Your biggest enemy is a day spent not writing, not a day spent writing too little.
5. Blogging builds up good work habits; the deadline is always "now."
New items in my Mexican village
As many of my readers know, I visit a small Mexican village, San Agustin Oapan, one or twice every year. This pueblo in Guerrero has about 1500 people, most of whom farm corn and paint for a living. You’ll hear more when my book on the place comes out next year, from University of Michigan Press. In the meantime, here are the new items I have noticed in the village this year:
1. Apples
2. Green beans
3. A much improved road. A four hour trip now takes less than an hour and a half, at least if the rains permit. This makes an especially big difference if you have to take your kid to the doctor.
4. Stoves. They were once a rarity, now they are commonplace. It takes the fun out of watching people cook for you, but hey that is progress.
5. Small shops with wrapped items from the larger city of Iguala. Shampoo and band-aids, for instance, are now easy to find.
6. The number of “retail” (and I use that word cautiously) watermelon sellers has gone from one to at least three.
7. The number of pigs has doubled over the last five years, though not always to the benefit of the town streets.
As far as I can tell, most of this does not show up in the growth statistics for Mexico. No one (except for yours truly) comes to the place to count anything. Most of the transactions occur in black or grey markets. And even if the data were recorded, using market prices to measure underestimates the benefits from a sudden introduction of new commodities (in essence the price is falling from infinity to a market level, and the first consumers at the new price might value the item at more than a small amount above the observed price).
It is commonly the case that consumption statistics, when we have them, measure changes in income better than do income statistics.
Globalization does not make everyone better off, but its beneficial effects are commonly underestimated, and undermeasured by available statistics.
Marriage Mathematics and Political Change
John Gottman has spent decades studying how married couples interact. His most striking finding is the tendency of couples at risk of divorce to have markedly different interaction styles. His recent book, The Mathematics of Marriage, summarizes his observations of married couples and presents a parsimonious model of marriage (see here for Slate’s review). The highlight of the research is that couples where the dominant mode of interaction includes criticism, contempt, defensiveness and stonewalling are very, very likely to divorce. Successful marriages involve a great deal of mending and reworking of the relationship. The mathematics links some theories about emotions and interaction to this observed pattern.
What I find interesting is the implication for thinking about politics. Let’s assume that political order is a sort of “marriage” between state and citizen. At least from the perspective of the citizen, it’s a relationship that can be broken, if warranted. This is a premise of many normative theories of revolution – the citizens have a right to a new government if they feel the written and unwritten rules have been violated. Unfortunately, what we know about exactly how this happens – moving to abandon the social contract – is sketchy at best, although political scientists and sociologists have a hunch that it involves some combination of repression of the population and a de-legitimizing of the government, which itself might have multiple causes.
Gottman’s approach to studying relationships offers a useful way to think about these issues. Gottman’s point is that there may be varying sources of the emotions that destroy marriages, but the road to divorce usually starts in the same place – once spouses have learned certain interaction strategies, they create hard to change feedback loops. Similarly, governments and populations that learn certain strategies for interacting with each other probably set up hard to break cycles leading to long term stability or perpetual crisis. The nice thing about Gottman’s analysis of marriage is that the math predicts stability or decline, and not much in between – a non-trivial prediction. The same prediction for states is that states tend to be on a tough to change road to constant crisis (like in Africa and the Middle East) or stability (like in the US). Switches from one path to the other should be infrequent and difficult, which seems to describe the world pretty well.
The Prisoner’s Dilemma of Non-Competes
I agree with Tyler, that the FTC ban on non-competes is overly broad and not tailored to fields where the drawbacks outweigh the benefits. Additionally, the FTC’s authority to enact this rule, rather than Congress, is questionable.
Nevertheless, I don’t think banning non-competes is without merit. The reason is not the standard Twitter-econ view that non-competes are bad for workers. Indeed, some non-competes, so-called “gardening leave”, pay the worker during the non-compete period. Sounds pretty good! More generally, non-competes are just one item in the wage bargain like hours, health and pension benefits. As a result, the FTC is quite wrong to think that banning non-competes will raise wages–the most immediate effect will be to reduce wages. Indeed, more workers will be willing to work at lower wages precisely to the extent that non-competes were a burden. Can’t have it both ways. Instead of being bad for workers, my skepticism about non-competes is that they are bad for industry.
The problem with non-competes is that every firm wants non-competes on the workers it fires but no firm wants non-competes on the workers it hires. However, firms only control the terms on which they hire workers so it’s possible for each firm acting in its self-interest to create a situation which is in the interests of none. Or, to put it differently, firms may approve of the decision to ban non-competes because it’s a package deal, firms can’t restrict their own former employees but they gain the ability to recruit freely from competitors.
More generally, worker mobility often carries externalities. As I wrote earlier, ideas are in heads and if you don’t move the heads, often the ideas don’t move either. The innovation that results from mobility is a public good. Non-competes are a type of intellectual property, call it intellect property. Once again, firms want to lock up their intellectual property but they also want to use ideas from other firms. Firms only control the former decision not the latter so IP in general has a prisoner’s dilemma issue which is one reason IP in the US is too strong (see the Tabarrok Curve) and non-competes are part of that package. Ultimately, if the innovation effects are important, wages could rise but those effects would be for more or less all workers not specifically for those with non-competes.
Governments aren’t good at the fine details of optimizing IP so perhaps a heavy-handed approach is the best we can expect. Non-competes also aren’t a huge issue for most firms, even firms that use them, so given the above I am willing to give the experiment a try.
Why a Housing Shortage Exists Despite More Houses Per Person
When I post about the skyrocketing price of housing and the need to build, commentators (include some of the most astute commentators on MR), will sometimes object by pointing to the increasing and historically high number of houses per capita. They question how this aligns with rising prices and wave vaguely towards factors like monopoly pricing, hedge funds, Airbnb, vacancies and so forth, implying that more construction isn’t the solution. The real explanation for rising prices amid greater homes per capita is actually quite simple, fewer kids. Kevin Erdmann has an excellent post on this going through the numbers in detail. I will illustrate with a stylized example.
Suppose we have 100 homes and 100 families, each with 2 parents and 2 kids. Thus, there are 100 homes, 400 people and 0.25 homes per capita. Now the kids grow up, get married, and want homes of their own but they have fewer kids of their own, none for simplicity. Imagine that supply increases substantially, say to 150 homes. The number of homes per capita goes up to 150/400 (.375), an all time high! Supply-side skeptics are right about the numbers, wrong about the meaning. The reality is that the demand for homes has increased to 200 but supply has increased to just 150 leading to soaring prices.
Now what do we do about this? One response is to blame people’s choices–immigrants are buying all the houses, hedge funds are buying all the houses, tourists are renting all the houses, everyone should want less and conserve more! Going down this path will tear the country apart. The other response is the American way, in the words of Bryan Caplan’s excellent new book, build, baby, build!
Here’s Kevin:
We are already 15 years into a cultural and economic battle that is so important, it turned the direction of adults per house upward for, likely, the first time since the start of the industrial revolution. Fifteen years in, by that measure, we have reversed economic progress by nearly 40 years. There is so much ground we have to make up. And, also, the reactionary position will have to continue to dig deeper and get worse – rounding up immigrants, blaming the homeless, stoking fear and distrust of financial institutions. I’m sorry if I’m sounding too shrill. It all happens in slow motion around us, so we adapt to the new normal. But the tent encampments in all the urban parks are a long way from what should be considered normal. We are already deeply into a cultural battle. And you can see that it is a cultural battle, because it is difficult to simply establish a plurality of support to admit obvious things.
If this continues, it will destroy the fabric of mutual trust that has managed to miraculously hold this country together for 250 years. The challenge is to open the eyes of enough victims of these policy choices that 50%+1 of the country can address it on the empirical level rather than the aesthetic level, and to stop this devolution before it gets worse.
Hat tip: Naveen.
The Adderall Shortage: DEA versus FDA in a Regulatory War
A record number of drugs are in shortage across the United States. In any particular case, it’s difficult to trace out the exact causes of the shortage but health care is the US’s most highly regulated, socialist industry and shortages are endemic under socialism so the pattern fits. The shortage of Adderall and other ADHD medications is a case in point. Adderall is a Schedule II controlled substance which means that in addition to the FDA and other health agencies the production of Adderall is also regulated, monitored and controlled by the U.S. Drug Enforcement Administration (DEA).
The DEA aims to “combat criminal drug networks that bring harm, violence, overdoses, and poisonings to the United States.” Its homepage displays stories of record drug seizures, pictures of “most wanted” criminal fugitives, and heroic armed agents conducting drug raids. With this culture, do you think the DEA is the right agency to ensure that Americans are also well supplied with legally prescribed amphetamines?
Indeed, there is a large factory in the United States capable of producing 600 million doses of Adderall annually that has been shut down by the DEA for over a year because of trivial paperwork violations. The New York Magazine article on the DEA created shortage has to be read to be believed.
Inside Ascent’s 320,000-square-foot factory in Central Islip, a labyrinth of sterile white hallways connects 105 manufacturing rooms, some of them containing large, intricate machines capable of producing 400,000 tablets per hour. In one of these rooms, Ascent’s founder and CEO — Sudhakar Vidiyala, Meghana’s father — points to a hulking unit that he says is worth $1.5 million. It’s used to produce time-release Concerta tablets with three colored layers, each dispensing the drug’s active ingredient at a different point in the tablet’s journey through the body. “About 25 percent of the generic market would pass through this machine,” he says. “But we didn’t make a single pill in 2023.”
… the company has acknowledged that it committed infractions. For example, orders struck from 222s must be crossed out with a line and the word cancel written next to them. Investigators found two instances in which Ascent employees had drawn the line but failed to write the word.
The causes of the DEA’s crackdown appears to be precisely the contradiction in its dueling missions. Ascent also produces opioids and the DEA crackdown was part of what it calls Operation Bottleneck, a series of raids on a variety of companies to demand that they account for every pill produced.
To be sure, the opioid epidemic is a problem but the big, multi-national plants are not responsible for fentanyl on the streets and even in the early years the opioid epidemic was a prescription problem (with some theft from pharmacies) not a factory theft problem (see figure at left). Maybe you think Adderall is overprescribed. Could be but the DEA is supposed to be enforcing laws not making drug policy. The one thing one can say for certain is that Operation Bottleneck has surely been a success in creating shortages of Adderall.
The DEA’s contradictory role in both combating the illegal drug trade and regulating the supply of legal, prescription drugs is highlighted by the fact that at the same as the DEA was raiding and shutting down Ascent, the FDA was pleading with them to increase production!
For Ascent, one of the more frustrating parts of being told by the government to stop making Adderall is that other parts of the government have pleaded with the company to make more. The company says that on multiple occasions, officials from the FDA asked it to increase production in response to the shortage, and that Ron Wyden, the Democratic senator from Oregon, also pressed Ascent for help. They received responses similar to those the company gave the stressed-out callers looking for pills: Ascent didn’t have any information. Instead, the company directed them to the DEA.
Why is there a movement to ban lab-grown beef?
That is the topic of my latest Bloomberg column, here is one bit:
…let me offer another theory: The anti-lab-grown-meat movement is about conservative cultural insecurity — the fear that, without the force of law, some conservative cultural norms will fade away…
Imagine that lab-grown meat proves feasible at a reasonable cost. It might end up as cheaper than beef from a cow, and it might also be better for the climate. In such a world, there might be growing pressures to abandon real meat for the lab-grown kind. There could even be a political movement to tax or ban real meat, similar to carbon taxes or plans to phase out fossil fuels.
Currently there is no momentum in that direction. For all the talk of vegetarianism and veganism, the percentage of Americans who practice those beliefs seems to be roughly flat. Many Americans like eating meat, for better or worse. But if real meat had a true substitute, perhaps the political calculus would differ.
This is the real fear — not of lab-grown meat itself, but of the changing culture its popularity would represent. Whether conservatives find the meat substitute to be adequate is beside the point. Society would have decided that some of their most cherished beliefs can be disposed of. Both humankind’s dominion over nature, which runs strong in the Christian strand of conservative thought, and the masculinized meat-eating culture — more specifically, the meat-grilling culture — would be under threat.
If artificial meat is banned, of course, none of that can happen.
In one sense, critics of conservatism should be heartened by the campaign against lab-grown meat. If I were a mainstream animal-rights advocate, I would revise upwards my estimate of my own power and influence.
I then consider how we might use science to arrive at a better resolution of these disputes.
Can you guess who wrote this passage?
We often hear today that Wokeism and Political Correctness are gradually receding. Contrary to this opinion, I think that this phenomenon is gradually being “normalized,” widely accepted even by those who intimately doubt it, and practiced by the majority of academic and state institutions. This is why it deserves more than ever our criticism — together with its opposite, the obscenity of new populism and religious fundamentalism. In Cancel Culture at its worst, your public life can be destroyed for reasons that are not even clear in advance. This is what makes Cancel Culture so threatening: something very particular that you did (or are) can be unexpectedly elevated into the universal status of an unforgivable mistake, so that every particular case is never just a neutral case of universality but gives its own spin to a fuzzy universality.
No, it is not Bari Weiss, not Naveen or even Community Notes. Please try to guess first, but if you must you can peek here.
Algorithmic Collusion by Large Language Models
The rise of algorithmic pricing raises concerns of algorithmic collusion. We conduct experiments with algorithmic pricing agents based on Large Language Models (LLMs), and specifically GPT-4. We find that (1) LLM-based agents are adept at pricing tasks, (2) LLM-based pricing agents autonomously collude in oligopoly settings to the detriment of consumers, and (3) variation in seemingly innocuous phrases in LLM instructions (“prompts”) may increase collusion. These results extend to auction settings. Our findings underscore the need for antitrust regulation regarding algorithmic pricing, and uncover regulatory challenges unique to LLM-based pricing agents.
That is a new paper by Sara Fish, Yannai A. Gonczarowski, and Ran I. Shorrer. The authors are running too quickly into their policy conclusion there (how about removing legal barriers to free entry in many cases? not worth a mention?), but nonetheless very interesting work. Via Ethan Mollick.
Emergent Ventures, 33rd cohort
Alex Bartik and Arpit Gupta, Chicago and NYU, to work on zoning codes, machine learning, and LLMs.
Sasha Przyblski, 16, Ontario, building more durable batteries.
Egzona Marina, Kosovo and MIT, to promote science and neuroscience education in Kovoso.
Aldrich Heinz Alvarez, Manila, travel grant to San Francisco and Singapore, wearables that harness multi-modal AI.
Molly Cantillon, Stanford, for a hacker house at Stanford.
Ayush Tambde, Dublin (Mumbai), physics and wormholes, and to finance a trip to San Francisco.
Candela Francisco, 17, Buenos Aires, to become the world’s greatest woman chess player.
Aabhas Senapati, Harvey Mudd, from Ahmedabad, general career support, and for work on ecosystems.
Erick Li, Mexicali, to visit a social science conference at Harvard.
Lorcan Geraghty, Country Wicklow, Dublin, EirSpace, aerospace for Ireland.
Regan Arntz-Gray, Brooklyn, writing on feminism.
Steven Gong, Waterloo, to make videos on topics related to physics and math.
Dominic Sobhani, Midwest, Columbia University and now Tokyo, Progress Studies-related meet-ups and also personal travel.
Tomas Markey, 17, Ballineen, Cork area, Direct Air Capture Engineering.
Alexander Koch, Germany, Bay Area, robotics and robot learning.
Dylan Iskandar, Stanford, computer science, music, general career support.
Vesuvius Project, Bay Area.
Mark Koyama and Desiree Desierto, for British economic and political history, including in the 17th century.
Grant Getzelman, Bay area, computational wetware.
Naina Kumar, McLean, Virginia, 16, surgery + AR.
Ukraine:
Yanchuk Dmytro, Kyiv, repairing electric station short circuits.
And here is Nabeel’s AI-driven directory of previous EV winners.
An RCT for income-sharing agreements
Is this the first one?
We conduct a survey-based experiment with 2,776 students at a non-profit university to analyze income insurance demand in education financing. We offered students a hypothetical choice: either a federal loan with income-driven repayment or an income-share agreement (ISA), with randomized framing of downside protections. Emphasizing income insurance increased ISA uptake by 43%. We observe that students are responsive to changes in contract terms and possible student loan cancellation, which is evidence of preference adjustment or adverse selection. Our results indicate that framing specific terms can increase demand for higher education insurance to potentially address risk for students with varying outcomes.
That is from a new NBER working paper by
Applying to Emergent Ventures, and how to get Britain moving again
From the TxP Progress Prize:
But then Tyler asked us, twice in a row, ‘what is your signature product?’ Being honest, we realised even if our pitch was strong at a high level, we’d essentially just submitted a laundry list of ideas for what we wanted to deliver, without much focus. We knew we had to go back to the drawing board.
Then:
The blog prize was designed to advocate solutions, amplify frontier tech, and offer a clear, tractable proposal. We particularly wanted punchy takes that pulled the debate outside the norm and we encouraged people to publish online to prompt discussion. We also rewarded good writing and pointed to pieces we’d been inspired by.
That is from Andrew Bennett and Tom Westgarth. The theme was “Britain is Stuck: How Can We Get It Moving Again?” The winners (EV had no role in this selection) were:
Winner (£5000)
Rian Whitton: Firm Power can reduce Britain’s electricity prices
Runner up (£1000)
Alec Thompson: Open Source the Law
Shortlisted (£750)
Ashna Ahmad: Chilean Telexes and the Allocation Problem
Ben Hopkinson: Britain’s Second Cities are Stuck: Let’s Get Them Moving Again
Daniel Timms: The Case for a New City
At the link you will find further commendable mentions.
Lawyering in the Age of Artificial Intelligence
We conducted the first randomized controlled trial to study the effect of AI assistance on human legal analysis. We randomly assigned law school students to complete realistic legal tasks either with or without the assistance of GPT-4. We tracked how long the students took on each task and blind-graded the results. We found that access to GPT-4 only slightly and inconsistently improved the quality of participants’ legal analysis but induced large and consistent increases in speed. AI assistance improved the quality of output unevenly—where it was useful at all, the lowest-skilled participants saw the largest improvements. On the other hand, AI assistance saved participants roughly the same amount of time regardless of their baseline speed. In follow up surveys, participants reported increased satisfaction from using AI to complete legal tasks and correctly predicted the tasks for which GPT-4 were most helpful. These results have important descriptive and normative implications for the future of lawyering. Descriptively, they suggest that AI assistance can significantly improve productivity and satisfaction, and that they can be selectively employed by lawyers in areas where they are most useful. Because these tools have an equalizing effect on performance, they may also promote equality in a famously unequal profession. Normatively, our findings suggest that law schools, lawyers, judges, and clients should affirmatively embrace AI tools and plan for a future in which they will become widespread.
That is by Jonathan H. Choi, Amy Monahan, and Daniel Schwarcz, forthcoming in the Minnesota Law Review. Via the excellent Kevin Lewis.
Austin Vernon on drones and defense (from my email)
I think they still favor the defensive. On the front line they make movement, hence offense, very difficult.
In the strategic sense we’ve already seen Ukraine adjust to the propeller drone/cruise missile attacks. The first few months were terrible for them but then they organized a defense system with the mobile anti drone teams. The interception percentage for drones traveling a fair distance over Ukraine is extremely high, 98% type numbers. Most of the Russian focus in now on more “front line” targets like Odessa because the Ukrainians don’t have as much time and space to make the interception. They are downing maybe 60%-70% of those drones.
The Russians are slow to adapt, but they eventually do. There is no reason to believe they won’t get better at intercepting these slow drones. Expensive cruise missiles with high success rates can end up being a better deal when strategic drones have 98% loss rates. The slow drones are better suited for near front line attacks. It also wouldn’t surprise me if they adapted to be more expensive to add features like quiet engines, thermal signature obfuscation, and lower radar cross sections.
I also think it’s worth pointing out that the Houthis have tried unmanned surface vehicles and they’ve all been quickly destroyed. Same with their slower drones. The hardest weapons to defend against have been conventional anti ship missiles and the newer ballistic anti ship missiles. You can argue about the intercepting missiles being too expensive, but the US is moving towards using more APKWS guided rockets against these strategic drone targets. These only cost $30,000 each and we already procure tens of thousands of them each year. The adaptation game is ongoing but the short range FPV drones seem quite durable while the strategic slow speed drone impact looks less sustainable.
Here is my original post.