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An Economy of AI Agents

arxiv.org

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Re: An Economy of AI Agents

#51

Post by Libidinalecon »

mewpmewp2 wrote: post #35
zkmon wrote: post #29

Earlier quoted context omitted.

But rule-based processing was exactly the requirement. Why should the workflow automation come up with rules on the fly, when the rules were defined in the business process requirements? Aren't the deterministic rules more precise and reliable over the rules defined by probabilistic methods? Autonomy/automation makes sense where error-prone repetitive human activity is involved. But rule definitions are not repetitiv…

Sometimes the rules are not as easy to define ahead of time. As an example imagine having to categorize some sort of text based requests etc. Or decide what the next step should be based on freeform text, images, etc. Hardcoded rule based would have to try and attempt to match to certain keywords etc, but you see how that can start to go wrong?

There is always much path dependence in what becomes the business requirements, making the business requirements less than optimal to start with.

Then over time their is a type of entropy with all business processes.

If we don't figure out dynamic systems to handle this it is hard to see how we get a giant productivity boost across the economy.

There is also the problem that what percentage of people even have exposure to the concepts of dynamic systems? When I was in college, I distinctly remember thinking dynamic systems, "chaos theory", was some kind of fractal hippy pseudoscientific fraud best to ignore.

I think of how often I hear the average person use language from probability theory but never from dynamic systems.

Re: An Economy of AI Agents

#52

Post by mewpmewp2 »

zkmon wrote: post #49
mewpmewp2 wrote: post #47

Earlier quoted context omitted.

In many cases I do have AI writing code runtime for my tasks. E.g. if I'm doing analysis of something, or some data, I can ask AI to gather the data (it writes code for scraping or uses pre existing scraping/web search tools), then it uses python or typescript to analyze the data. After which it will use e.g. React in the web app to render the Charts, Tables in customized, personalized format. For instance, I might b…

None of what you said qualifies as coding at run time . I think you missed at . At run time, code is executed, not designed or defined.

Okay I tell AI to do X, it writes a script and executes it to perform X, how is that not defining code runtime?

AI agents like Claude Code or Codex constantly use the technique of writing temporary scripts and executing them inline.

Re: An Economy of AI Agents

#53

Post by zkmon »

mewpmewp2 wrote: post #52
zkmon wrote: post #49

Earlier quoted context omitted.

None of what you said qualifies as coding at run time . I think you missed at . At run time, code is executed, not designed or defined.

Okay I tell AI to do X, it writes a script and executes it to perform X, how is that not defining code runtime? AI agents like Claude Code or Codex constantly use the technique of writing temporary scripts and executing them inline.

If your system receives 1000 requests per second, does it keep writing code while processing every request, on per request basis? I hope you understand what run time means.

Re: An Economy of AI Agents

#54

Post by bofadeez »

nivertech wrote: post #27
bofadeez wrote: post #16

Earlier quoted context omitted.

They can all be related on a philosophical level but in practice economists treat them as separate factors of production. It's land, labor, and capital classically. Technology/entrepreneurship can be seen as another factor, distinctly separate from labor.

I agree that time isn’t an input in the economic system. Although, one can use either discrete or continuous time to simulate a complex economic system. Only simple closed form models take time as in input, e.g. compounded interest or Black-Scholes. Also, there are wide range of hourly rates/salaries, and not everyone compensated by time, some by cost-and-materials, others by value or performance (with or without ris…

> Although, one can use either discrete or continuous time to simulate a complex economic system.

A very bad model that lacks accuracy and precision, yes. Maybe if you're a PhD quant at Citadel then you can create a very small statistical edge when gambling on an economic system. There's no analytic solution to complex economic systems in practice. It's just noise and various ways of validating efficient market hypothesis.

Also, because of heteroskedasticity and volatility clustering, using time-based bars (e.g. change over a fixed interval of time) is not ideal in modeling. Sampling with entropy bars like volume imbalance bars, instead of time bars, gives you superior statistical properties, since information arrives in the market at irregular times. Sampling by time is never the best way to simulate/gamble on a market. Information is the casual variable, not time. Some periods of time have very little information relative to other periods of time. In modeling, you want to smooth out information independently of time.

Re: An Economy of AI Agents

#55

Post by mewpmewp2 »

zkmon wrote: post #53
mewpmewp2 wrote: post #52

Earlier quoted context omitted.

Okay I tell AI to do X, it writes a script and executes it to perform X, how is that not defining code runtime? AI agents like Claude Code or Codex constantly use the technique of writing temporary scripts and executing them inline.

If your system receives 1000 requests per second, does it keep writing code while processing every request, on per request basis? I hope you understand what run time means.

Define runtime then.

> If your system receives 1000 requests per second, does it keep writing code while processing every request, on per request basis? I hope you understand what run time means.

With enough scale it could, however it really depends on the use case, right? If we are considering Claude Code for instance, it probably receives more than 1000+ requests per second and in many of those cases it is probably writing code or writing tool calls etc.

Or take Perplexity for example. If you ask it to calculate a large number, it will use Python to do that.

If I ask Perplexity to simulate investment for 100 years, 4% return, putting aside $50 each month, it will use Python to write code, calculate that and then when I ask it to give me a chart it will also use python to create the image.

Re: An Economy of AI Agents

#56

Post by hyperadvanced »

bofadeez wrote: post #54
nivertech wrote: post #27

Earlier quoted context omitted.

I agree that time isn’t an input in the economic system. Although, one can use either discrete or continuous time to simulate a complex economic system. Only simple closed form models take time as in input, e.g. compounded interest or Black-Scholes. Also, there are wide range of hourly rates/salaries, and not everyone compensated by time, some by cost-and-materials, others by value or performance (with or without ris…

> Although, one can use either discrete or continuous time to simulate a complex economic system. A very bad model that lacks accuracy and precision, yes. Maybe if you're a PhD quant at Citadel then you can create a very small statistical edge when gambling on an economic system. There's no analytic solution to complex economic systems in practice. It's just noise and various ways of validating efficient market hypot…

I think this is pretty in-the-weeds compared to the original thread:

> Economics is like a constrained optimization problem: how to allocate scarce resources given unlimited desires.

Understanding the general tendencies of economic systems over time (e.g. “the rate of profit tends to fall”) is much more abstract than attempting to win at economics using time-based analysis.

Re: An Economy of AI Agents

#57

Post by nivertech »

bofadeez wrote: post #54
nivertech wrote: post #27

Earlier quoted context omitted.

I agree that time isn’t an input in the economic system. Although, one can use either discrete or continuous time to simulate a complex economic system. Only simple closed form models take time as in input, e.g. compounded interest or Black-Scholes. Also, there are wide range of hourly rates/salaries, and not everyone compensated by time, some by cost-and-materials, others by value or performance (with or without ris…

> Although, one can use either discrete or continuous time to simulate a complex economic system. A very bad model that lacks accuracy and precision, yes. Maybe if you're a PhD quant at Citadel then you can create a very small statistical edge when gambling on an economic system. There's no analytic solution to complex economic systems in practice. It's just noise and various ways of validating efficient market hypot…

I think we're talking apples vs oranges.

The thread was about economists, not quants.

> There's no analytic solution to complex economic systems in practice.

yes

Re: An Economy of AI Agents

#58

Post by bofadeez »

nivertech wrote: post #57
bofadeez wrote: post #54

Earlier quoted context omitted.

> Although, one can use either discrete or continuous time to simulate a complex economic system. A very bad model that lacks accuracy and precision, yes. Maybe if you're a PhD quant at Citadel then you can create a very small statistical edge when gambling on an economic system. There's no analytic solution to complex economic systems in practice. It's just noise and various ways of validating efficient market hypot…

I think we're talking apples vs oranges. The thread was about economists, not quants. > There's no analytic solution to complex economic systems in practice. yes

It started that way. I was responding to the assumption that time is the underlying variable of all economics. Then someone said everything reduces to time and they brought up Black-Scholes, a quant tool to price options. I didn't bring it up lol. My point is simply no, time is demonstrably not fundamental at all.

Edit: an LLM thinks I'm overly dismissive of: - Standard economic modeling - Dynamic macroeconomic theory - Agent-based economics - The legitimate uses of time in economics

This is true. I think causal inference in finance and economics is difficult. As Ludwig von Mises argued, mathematical models give spurious precision when applied to purposeful behavior. Academic ideas don't have a built-in feedback loop like in quant finance.

Re: An Economy of AI Agents

#59

Post by jmalicki »

zkmon wrote: post #45
mewpmewp2 wrote: post #44

Earlier quoted context omitted.

And what is this processor and how does it work? How does it determine next step from raw non structured content? Let's imagine for example that it's a message from a potential customer to a business. The processor must decide whether to e.g. give product recommendations, product advice, process returns, use specific tools to fetch more data (e.g. business policies, product manuals, etc), or current pricing, best pro…

I think you missed the whole point. Processor does not have routing logic. It's only job is to parse the request (form, text, image etc) and categorize it enough so that the workflow can do the routing for next actions. Routing is done by traditional predetermined logic, using rules. The discussion here is about whether it helps to define that routing logic at runtime (on-the-fly), instead of having it coded in prede…

AI-based tools are mostly about replacing the processor with something smarter, not the router.

Of course, sometimes it can be an advantage to not have to explicitly write the router, but the big benefit is the better processor for request->categorization, which with AI can even include clarification steps.

Re: An Economy of AI Agents

#60

Post by phantasmish »

brazukadev wrote: post #34
altmanaltman wrote: post #22

Earlier quoted context omitted.

Except they don't really "think" and they are not conscious. Expecting your toaster or car to never rise up against you is a good strategy. AI models have more in common with a toaster than with a human being. Which is why they cannot be economic agents. Even if corporations profit off them, the corporation will be the economic agent, not the AI models.

Give them a body and means to protect themselves and no matter what you say, they will be thinking.

We may as well be talking about the hypothetical properties of pixies or angels.
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