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Why outcome-billing makes sense for AI Agents

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Re: Why outcome-billing makes sense for AI Agents

#41

Post by spwa4 »

altcognito wrote: post #39
ivanstojic wrote: post #34

I started reading the article and immediately got hit by the incorrect statement in the opening: > If AI agents help each support employee handle 30% more tickets, that's like adding 30 new hires to a 100-person team, without the cost. I think this is an oversimplification designed to make LLMs seem more profitable than they actually are.

This is an article written by a company/llm trying to justify huge increases to the pricing structure. Oh! Yknow that thing we were charging you $200 a month for now? We're going to start charging you for the value we provide, and it will now be $5,000 a month. Meanwhile, the metrics for "value" are completely gamed.

> Meanwhile, the metrics for "value" are completely gamed.

Well, of course. One of the huge advantages of agents is that they will actually help you to almost any extent game metrics.

Unlike people, who have ...

Re: Why outcome-billing makes sense for AI Agents

#42

Post by rajvarkala »

sailfast wrote: post #35

The one wrinkle this might have is that it incentivizes the agent developer to over-resolve or “over outcome” to ensure they hit targets. This is risking the end customer experience for your Agent buyer, which might not be worth the risk to a company that wants to keep customers very happy.

Yes. Always exists. There neesd to be a secondary mechanism to verify .

But, again, such systems already exist. The folk theorem guarantees this. In a repeated game, people crave reputation.

For instance, seller over-resolving will suffer in the long run, I guess.

Re: Why outcome-billing makes sense for AI Agents

#43

Post by melagonster »

rajvarkala wrote: post #38
ivanstojic wrote: post #34

I started reading the article and immediately got hit by the incorrect statement in the opening: > If AI agents help each support employee handle 30% more tickets, that's like adding 30 new hires to a 100-person team, without the cost. I think this is an oversimplification designed to make LLMs seem more profitable than they actually are.

oversimplified surely, sweeping assumptions.... As much as I hate the assumptions, the worst case scenario is that AI is surely affecting some jobs.

But I'm sure that 30% employee is more valuable than just calling API in one month. So the price is too high.

Re: Why outcome-billing makes sense for AI Agents

#44

Post by LPisGood »

rajvarkala wrote: post #38
ivanstojic wrote: post #34

I started reading the article and immediately got hit by the incorrect statement in the opening: > If AI agents help each support employee handle 30% more tickets, that's like adding 30 new hires to a 100-person team, without the cost. I think this is an oversimplification designed to make LLMs seem more profitable than they actually are.

oversimplified surely, sweeping assumptions.... As much as I hate the assumptions, the worst case scenario is that AI is surely affecting some jobs.

Productivity continues to increase but we are employing more people, not less

Re: Why outcome-billing makes sense for AI Agents

#45

Post by rajvarkala »

LPisGood wrote: post #44
rajvarkala wrote: post #38

Earlier quoted context omitted.

oversimplified surely, sweeping assumptions.... As much as I hate the assumptions, the worst case scenario is that AI is surely affecting some jobs.

Productivity continues to increase but we are employing more people, not less

Of course, there is displacement. Jobs evolve.

Re: Why outcome-billing makes sense for AI Agents

#46

Post by Ekaros »

wagwang wrote: post #16
_pdp_ wrote: post #15

You can apply the same philosophy to employees and if you dare to do so you will quickly find out that it does not work. When a measure becomes a target, it ceases to be a good measure - Goodhart's law. I cannot see why AI agents should be treated differently when it comes to fuzzy measurements of performance.

Bcuz the performance is usually not fuzzy and also the law only applies to certain jobs -- you would not apply the law to salesmen or customer support agents.

Salesmen are absolutely perfect example. They quite often have even greater incentives as they can directly financially benefit. So selling products that are not needed, that are over priced or entirely misrepresented is extremely common.

Re: Why outcome-billing makes sense for AI Agents

#47

Post by rajvarkala »

spwa4 wrote: post #41
altcognito wrote: post #39

Earlier quoted context omitted.

This is an article written by a company/llm trying to justify huge increases to the pricing structure. Oh! Yknow that thing we were charging you $200 a month for now? We're going to start charging you for the value we provide, and it will now be $5,000 a month. Meanwhile, the metrics for "value" are completely gamed.

> Meanwhile, the metrics for "value" are completely gamed. Well, of course. One of the huge advantages of agents is that they will actually help you to almost any extent game metrics. Unlike people, who have ...

:)

Re: Why outcome-billing makes sense for AI Agents

#48

Post by lbreakjai »

rajvarkala wrote: post #21
Neywiny wrote: post #14

Maybe it's not as nice a story there as he's from India, but outside India people like to talk about their cobra problem and failed solution (retold below). This feels like that. If it's a ticket system, it could close them all as unresovable overnight. If it cares about customer satisfaction, it could give everybody thousand dollar gift cards. Point is, AIs existence is predicated on finding a way to improve its sco…

Sure, incentives can be gamed. The same oversight mechanism that applies to humans cannot correct the flaws of AI agents? What do you think is the catch? I am not saying things are clearly defined in most settings. But my accounting agent ( real person) gets paid only when he files my tax returns.

Humans respect the rules because if they don't, then they lose their jobs, can't pay their mortgages, and become homeless. That's quite a powerful incentive not to fudge the numbers too much.

There's no LLM equivalent.

Re: Why outcome-billing makes sense for AI Agents

#49

Post by rajvarkala »

lbreakjai wrote: post #48
rajvarkala wrote: post #21

Earlier quoted context omitted.

Sure, incentives can be gamed. The same oversight mechanism that applies to humans cannot correct the flaws of AI agents? What do you think is the catch? I am not saying things are clearly defined in most settings. But my accounting agent ( real person) gets paid only when he files my tax returns.

Humans respect the rules because if they don't, then they lose their jobs, can't pay their mortgages, and become homeless. That's quite a powerful incentive not to fudge the numbers too much. There's no LLM equivalent.

The agent builder loses contract .. Is this not force enough to make AI worthwhile?

Re: Why outcome-billing makes sense for AI Agents

#50

Post by rajvarkala »

altcognito wrote: post #39
ivanstojic wrote: post #34

I started reading the article and immediately got hit by the incorrect statement in the opening: > If AI agents help each support employee handle 30% more tickets, that's like adding 30 new hires to a 100-person team, without the cost. I think this is an oversimplification designed to make LLMs seem more profitable than they actually are.

This is an article written by a company/llm trying to justify huge increases to the pricing structure. Oh! Yknow that thing we were charging you $200 a month for now? We're going to start charging you for the value we provide, and it will now be $5,000 a month. Meanwhile, the metrics for "value" are completely gamed.

The price will be what you are willing to pay. No justification required, excepting for fairness (info asymmetry and what else?). It is written by me. Unfunded bootstrapped !!call it dire straits.
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