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Jevons paradox

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Re: Jevons paradox

#71

Post by mkleczek »

isaacfrond wrote: post #55
pizza234 wrote: post #37

This is IMO a spefic case of the induced demand concept ( https://en.wikipedia.org/wiki/Induced_demand ).

Reddit explains the difference thus: "Induced demand": The highway is expanded such that it only takes me 15 minutes to get downtown instead of 45, so I go downtown more. Jevson paradox: The highway is expanded such that it only takes 15 minutes to get from the suburbs to my office instead of 45, so I move to the suburbs. So one is movement along the demand curve, while the other is a movement of the demand curve. ht…

I fail to see a difference. In both cases demand increased, no?

Re: Jevons paradox

#72

Post by simgt »

BenFranklin100 wrote: post #47
pizza234 wrote: post #37

This is IMO a spefic case of the induced demand concept ( https://en.wikipedia.org/wiki/Induced_demand ).

As an aside, the concept of Induced demand has been criticized. A more precise way to think about “induced demand” is that the demand for a product at a lower price point was preexisting. The transaction didn’t clear until the price actually became lower and this demand manifested itself. This seems like splitting a hair but it is a more consistent intellectual framework for understanding the dynamics of a particular…

I don't see how that is more precise. What is the definition of "demand" in that case? Anything that could ever happen at one point, or something that is actually wanted (needed?) by someone who's formulating the thought consciously?

Re: Jevons paradox

#73

Post by YurgenJurgensen »

llm_trw wrote: post #24
spamizbad wrote: post #20

Earlier quoted context omitted.

This is just a baseless conspiracy theory that I have, but I do wonder if they intentionally avoided certain avenues of research because it could erode the “moat” major tech firms have by dramatically reducing the capital costs required for training and inference. If you focus your research around work that mandates high-end hardware at scale you can lock out tons of potential incumbents

There is nothing in the deepseek paper that suggests you can't use the order of magnitude in hardware costs you saved to just train models that are ten times as large.

…and even if you can’t, you could train models that are ten times more specific, or update them ten times more frequently.

Re: Jevons paradox

#74

Post by cafed00d »

mminer237 wrote: post #33
casey2 wrote: post #22

The intuition behind this is that people who had a usecase for the tech but were locked out because they couldn't afford it, or didn't believe it was worth it usecase can be engineers or researchers. Some of these people may perform better than expected causing a gap in true market value which is filled when they scale up to their new size Related: Jenson's Paradox: The more you buy, The more you save

I guess my question about the current events is: Are people really locked out of LLMs due to price? It seems like everything already has AI in it and that virtually every end user hates it. I could see a shift to more local models or something, but not an increase. I feel like LLMs have largely been oversold as a solution in search of a problem. Or are people just applying this as everyone and their mothers are going…

Absolutely! Even for inference! The SOTA models for all commercial purposes need to run on a consumer’s device.

Running either Grok2 or DeepSeek or even Llama405b requires nearly 400-500gb of memory.

Buying a tinybox with enough gpu memory costs $15k-25k. Or equivalently the same if you build your own.

A distributed Mac cluster costs about the same, if not more, if you’re buying 2-3 M2 Ultra each with 192gb of memory.

So people are absolutely constrained by price/supply here. Every engineer, analyst, scientist would be far more untethered by rules & regulations or policies & terms-of-service nitty gritties if they can trust that LLM they use is completely local, without-telemetry or tracking and is licensed fairly for commercial use (perhaps this excludes llama).

Not a lot of people can afford $15k-30k in spending for a computer (that can run this sota llms). But you can a billion will buy one when it’s $1k

Re: Jevons paradox

#75

Post by aunty_helen »

The simplest explanation, Jevons paradox is cope from CEOs and retail investors trying to justify the share market.

People seem to have forgotten that there’s a time element involved, not a perfectly elastic and instant demand.

Thinking about it another way, if it turned out it was going to cost 30x more compute to train the next generation of models than we thought due to some scaling law, would the chip share prices be expected to rise, stay the same or go down? Probably rise.

In that case, if it was 30x cheaper to do what we need today would we expect option a, b or c?

Assuming that there would be less short / mid term sales, that impacts their bottom line and flattens off their (ie nvda) demand curve. Slower growth, lower share price. Slower growth, longer opportunity for competition. Therefore the speculative element of the chip leader’s share price’s should come down.

I don’t have any long or short positions in the chip sector.

Re: Jevons paradox

#76

Post by [deleted] »

mminer237 wrote: post #33
casey2 wrote: post #22

The intuition behind this is that people who had a usecase for the tech but were locked out because they couldn't afford it, or didn't believe it was worth it usecase can be engineers or researchers. Some of these people may perform better than expected causing a gap in true market value which is filled when they scale up to their new size Related: Jenson's Paradox: The more you buy, The more you save

I guess my question about the current events is: Are people really locked out of LLMs due to price? It seems like everything already has AI in it and that virtually every end user hates it. I could see a shift to more local models or something, but not an increase. I feel like LLMs have largely been oversold as a solution in search of a problem. Or are people just applying this as everyone and their mothers are going…

[deleted]

Re: Jevons paradox

#77

Post by enragedcacti »

BenFranklin100 wrote: post #47
pizza234 wrote: post #37

This is IMO a spefic case of the induced demand concept ( https://en.wikipedia.org/wiki/Induced_demand ).

As an aside, the concept of Induced demand has been criticized. A more precise way to think about “induced demand” is that the demand for a product at a lower price point was preexisting. The transaction didn’t clear until the price actually became lower and this demand manifested itself. This seems like splitting a hair but it is a more consistent intellectual framework for understanding the dynamics of a particular…

Induced demand is just the name for realized latent demand, your more precise way to think about it is the concept*. It's only muddled because it is often invoked in complex markets where the costs are often not monetary, there are substantial externalities to consider, or the supply is centrally managed.

Should a city spend $500,000 to install lighting in the park downtown? After all nobody uses it at night because its too dangerous! Induced demand is central to the answer but isn't a first thought for many because the problem space doesn't look like a traditional market.

* there is the additional concept that the long term availability of a good or service at a lower cost changes consumer behavior in a durable way. Building a new train station realizes latent demand but also creates new demand as it causes denser housing to be constructed near it**.

** Whether you want to model that as just more realized latent demand or as a consequence that's technically distinct from induced demand is IMO where a lot of the confusion comes from. If you ask me this should probably have a distinct name as it is a long-term, interrelated process that doesn't map well to sliding around supply and demand curves. Generated demand is what Bloomberg calls it but that has insane overlap with a marketing technique.

Re: Jevons paradox

#78

Post by cjbgkagh »

roenxi wrote: post #70
cjbgkagh wrote: post #68

Earlier quoted context omitted.

To my point, how much do you think a SMT solution costs now?

Couple of thousand dollars? Consultant turns up on site, gathers data, talks to a few people, sets up a model and solves it. Probably around a weeks work @ say $100/hr. Might be under-calling it for validation and there'll probably be some iteration to do so a project will take a few solves to complete + overheads.

The software is free, and few people even think about the hardware cost.

But that’s not how it always was, it was a core part of Bill Gates world domination plan during the ‘foundation’ era (2008). Good ones used to be super expensive, then they were sold as excel plugins, and now Z3 is given away for free. And despite being free it’s still not used nearly as often as it should be, it’s not the algorithm or price holding back adoption it’s the people. It was assumed that there was this huge untapped demand curve at the long end of the tail before finding out that there really was not. Z3 was originally released as academic use only (2012) on the assumption that it would drive demand for commercial use of Z3 or another commercial solution. Once it became clear that wasn’t going to make any real money they allowed it to be released for commercial use as well (2015).

As an aside people still do pay for SMT solvers so the market hasn’t completely disappeared but it’s clearly not what it was thought to be.

Re: Jevons paradox

#79

Post by satvikpendem »

mkleczek wrote: post #71
isaacfrond wrote: post #55

Earlier quoted context omitted.

Reddit explains the difference thus: "Induced demand": The highway is expanded such that it only takes me 15 minutes to get downtown instead of 45, so I go downtown more. Jevson paradox: The highway is expanded such that it only takes 15 minutes to get from the suburbs to my office instead of 45, so I move to the suburbs. So one is movement along the demand curve, while the other is a movement of the demand curve. ht…

I fail to see a difference. In both cases demand increased, no?

Here's [0] a good overview as to the differences.

[0] https://www.toppr.com/guides/business-economics/theory-of-de...

Re: Jevons paradox

#80

Post by diziet_sma »

mkleczek wrote: post #71
isaacfrond wrote: post #55

Earlier quoted context omitted.

Reddit explains the difference thus: "Induced demand": The highway is expanded such that it only takes me 15 minutes to get downtown instead of 45, so I go downtown more. Jevson paradox: The highway is expanded such that it only takes 15 minutes to get from the suburbs to my office instead of 45, so I move to the suburbs. So one is movement along the demand curve, while the other is a movement of the demand curve. ht…

I fail to see a difference. In both cases demand increased, no?

Yes, but for subtly different reasons. In the case of induced demand, the supply curve shifts to the right (eg number of highway lanes increases) so we move to the right on demand curve (or quantity increases, eg more people drive). On the Jevon's paradox case, efficiency increases (eg fuel efficiency increases), so the _demand_ curve shifts (eg more people people drive).
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