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Markets are competitive if and only if P != NP

arxiv.org

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Re: Markets are competitive if and only if P != NP

#131

Post by j05ev1f3 »

dreambuffer wrote: post #113
j05ev1f3 wrote: post #100

This feels like it's pointing in the same direction Hayek was already pointing 80 years ago. This paper says that even if we had enough computing power to solve these problems, Hayek's argument was that we still wouldnt have all the information needed to do those calculations in the first place. That information is spread across millions of people, constantly changing, and often only known locally. So even if the com…

But you can just give computers to each of those millions of people and propagate the information, instead of having less reliable humans doing it? That's kind of what's already happening.

The problem isn't transmitting information, it's how the knowledge is created. Some information only exists in peoples head until they act on it. Sometimes they don't even know it themselves until they're forced to make a decision.

Re: Markets are competitive if and only if P != NP

#132

Post by tavavex »

xxpor wrote: post #2

The actual paper's title is "Markets are competitive if and only if P != NP" Seems that HN's auto-headline rewriting in this case has made a critical error :) >Artificial intelligence, by expanding firms' computational capabilities, is pushing markets from the competitive regime toward the collusive regime, explaining the empirical emergence of algorithmic collusion without explicit coordination. I have to dig more i…

> Seems that HN's auto-headline rewriting in this case has made a critical error :)

I'm eagerly awaiting the day someone proves that P != NP and HN edits the title of the announcement post in this exact same way.

Re: Markets are competitive if and only if P != NP

#133

Post by ffsm8 »

abejfehr wrote: post #53
ffsm8 wrote: post #42

Earlier quoted context omitted.

The title on this HN submission is just wrong. Click on the link and find out.

isn't that what they're saying with "not both at the same time"? the papers both have opposite signs, one has != and the other has =

Without the braces around the perfectly I would have understood it... yeah, I think I was misinterpreting what he meant to say

Re: Markets are competitive if and only if P != NP

#134

Post by stymaar »

WarmWash wrote: post #122
peder wrote: post #95

Earlier quoted context omitted.

They're not just useful concepts tho, they're how every business operates, and the concepts cover the vast majority of situations. The behavioral economics/Freakonomics thing was like "Hey, here's this thing that might if you squint real hard fall outside of efficient market theory" and then for a decade people took that to mean that that the base concepts were worthless , which was a severe overcorrection from peopl…

Economics is one of the scientific sore spots for liberal ideology. If you are liberal and mostly swim in liberal circles, you probably believe that economics is mostly bunk pseudoscience. Akin to conservatives and climate change

In fact that there's both a liberal and conservative economics ideology, and what could form a scientific discipline in between is unfortunately cornered and sorely lacking visibility.

Re: Markets are competitive if and only if P != NP

#135

Post by throwaway27448 »

peder wrote: post #95
throwaway27448 wrote: post #89

Earlier quoted context omitted.

The fact that free markets don't exist, and that supply and demand is not a natural law that implies efficient markets has never stopped people acting like both are true and stuffing fingers in their ears. But, both free markets and supply/demand are useful enough concepts to talk loosely about processes to understand the interest that I'll enjoy digging into this.

They're not just useful concepts tho, they're how every business operates, and the concepts cover the vast majority of situations. The behavioral economics/Freakonomics thing was like "Hey, here's this thing that might if you squint real hard fall outside of efficient market theory" and then for a decade people took that to mean that that the base concepts were worthless , which was a severe overcorrection from peopl…

Well yes, market forces as theorized are the very premise we've structured our entire economy around. Or, more bluntly, the desire to purely encapsulate political-economic power in capital. How else could an economic process operate without being attacked by the state? But this is also why our market behaves so irrationally—these concepts have very obvious predictive limits that investors are struggling to grapple with and our politicians (and largely our electorate tbf) have blind faith in

Re: Markets are competitive if and only if P != NP

#136

Post by fc417fc802 »

xxpor wrote: post #2

The actual paper's title is "Markets are competitive if and only if P != NP" Seems that HN's auto-headline rewriting in this case has made a critical error :) >Artificial intelligence, by expanding firms' computational capabilities, is pushing markets from the competitive regime toward the collusive regime, explaining the empirical emergence of algorithmic collusion without explicit coordination. I have to dig more i…

> I don't see how this follows, except in the most straightforward way.

A more capable actor can anticipate the actions of other participants to a greater degree. Imagine that all sellers are such actors. Consider that collusion happens (and is bad) because it enables sellers to extract much higher prices than the market would otherwise set. When all sellers are such "hyper rational" actors they can act cooperatively to maximize their profits without the need to explicitly coordinate in secret. The same end result without the illegal step sure feels like an end run around the spirit of the law.

> Edit: Isn't another implication of this, that increased compute -> collusion imply that increased compute -> communism becomes feasible?

That depends on what you think the problem that communism faced was. AI increases our ability to centrally plan but it probably doesn't do much in and of itself to combat various forms of corruption. Human greed is an invariant; by glorifying and directly making use of it capitalism is hardened against a number of otherwise pathological behaviors.

Re: Markets are competitive if and only if P != NP

#137

Post by fc417fc802 »

HPsquared wrote: post #115
falcor84 wrote: post #93

Earlier quoted context omitted.

Well, for better or worse, markets are becoming increasingly dominated by "non-biological utility maximizers" - mostly hft bots, but now also llm-based reasoning agents.

They're not necessarily maximising utility, just the number on the screen.

"Ahkchually the paperclip maximizer isn't maximizing [human] utility, just a dumb metric" isn't a particularly useful observation to make in the context of the world being gradually consumed by an army of nanobots.

Re: Markets are competitive if and only if P != NP

#138

Post by BobaFloutist »

tsimionescu wrote: post #110
peder wrote: post #95

Earlier quoted context omitted.

They're not just useful concepts tho, they're how every business operates, and the concepts cover the vast majority of situations. The behavioral economics/Freakonomics thing was like "Hey, here's this thing that might if you squint real hard fall outside of efficient market theory" and then for a decade people took that to mean that that the base concepts were worthless , which was a severe overcorrection from peopl…

The vast majority of real world businesses create prices based on cost plus systems, not on supply/demand, which are generally impossible to measure directly. Another good chunk of smaller businesses simply copy the prices of larger businesses, at least in b2c markets. Sure, if their goods are not selling, they might reduce price, but they might try other tactics as well (marketing, targeted discounts, etc).

I always thought of supply and demand as more defining a limit that the price approaches as the number of transactions and the size of the market approach infinity, barring structural obstacles or persistent information asymmetry to prevent it than as something that was supposed to happen immediately on any given transaction.

Re: Markets are competitive if and only if P != NP

#139

Post by throwaway27448 »

WarmWash wrote: post #122
peder wrote: post #95

Earlier quoted context omitted.

They're not just useful concepts tho, they're how every business operates, and the concepts cover the vast majority of situations. The behavioral economics/Freakonomics thing was like "Hey, here's this thing that might if you squint real hard fall outside of efficient market theory" and then for a decade people took that to mean that that the base concepts were worthless , which was a severe overcorrection from peopl…

Economics is one of the scientific sore spots for liberal ideology. If you are liberal and mostly swim in liberal circles, you probably believe that economics is mostly bunk pseudoscience. Akin to conservatives and climate change

I think exactly the opposite: adherence to market economics, even to the extent of calling it a science, is what defines a liberal. In this sense conservatives are just angry liberals.

Tbf, most americans just sort of skate along on vibes and don't have many concrete values or material understanding of our society at all, regardless of how they identify.

Cf any argument over rent control: people either want it out of some sort of justice for inhumanely priced rents, or people bought into some kind of idea that it doesn't work because some think tank they put faith in pushed that messaging. Few people actually study the literally thousands of ways that almost every other society manages to house their population more effectively. It's all just vibes.

Re: Markets are competitive if and only if P != NP

#140

Post by throwaway27448 »

stymaar wrote: post #134
WarmWash wrote: post #122

Earlier quoted context omitted.

Economics is one of the scientific sore spots for liberal ideology. If you are liberal and mostly swim in liberal circles, you probably believe that economics is mostly bunk pseudoscience. Akin to conservatives and climate change

In fact that there's both a liberal and conservative economics ideology, and what could form a scientific discipline in between is unfortunately cornered and sorely lacking visibility.

The distinction between liberal and conservative political labeling in america is entirely cultural. There is precisely zero ideological, ie political-economic, difference. It's just culture wars all the way down while we get pickpocketed together.
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