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The Microeconomics of Artificial Intelligence (2025)

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Re: The Microeconomics of Artificial Intelligence (2025)

#51

Earlier quoted context omitted.

>Much of economics is built on models that were designed to provide a formal, logical basis for understanding the economic world, which is often quite unintuitive. I disagree. It's purposefully unintuitive. >(For example, many intelligent people uneducated in economics exhibit intuitions opposite of basic economic ideas like opportunity cost or comparative advantage.) Most people don't believe in comparative advantag…

Not sure comparative advantage needs past decisions to happen - could just be randomly distributed resources, for example.

Yes, Ricardo originally introduced the idea of comparative advantage in the context of international trade, in a model in which different countries had different endowments of resources.

Nothing that imtringued wrote above suggests he understands comparative advantage, which is the idea that it is relative productivity, not absolute productivity, that should determine what one specializes in. That’s precisely what I meant about people finding the concept unintuitive.

Re: The Microeconomics of Artificial Intelligence (2025)

#52
post #12

Earlier quoted context omitted.

Some concrete facts about LLMs are explained by their next token predictor nature. Every time it says "wait, that's wrong." instead of generating the correct thing the first time.

I think that's relatively emergent too though! BERT never really did that (at least to my recollection), presumably because its training was never sufficient for it to develop corrective reasoning in a chain of thought.

Back around late 2024 I think, LLMs were being trained to say "Wait," because that led to more correct answers in the end. It was actually a hack to inject "Wait," whenever the LLM tried to end a reasoning block.
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