Our findings do not support the political antitrust movements central hypothesis that there is an association between economic concentration and the concentration of lobbying power. We do not find a strong relationship between economic concentration and the concentration of lobbying expenditure at the industry level. Nor do we find a significant difference between top firms and other firms allocation of additional revenues to lobbying. And we find no evidence that increasing economic concentration has appreciably restricted the ability of smaller players to seek political influence through lobbying. Ultimately, our findings show that the political antitrust movements claims do not rest on a solid empirical foundation in the lobbying context. Our findings do not allay all concerns about transformation of economic power into political power, but they show that such transformation is not straightforward, and they counsel caution about reshaping antitrust law in the name of protecting democracy.

Here is the recent paper by Sepehr Shahshahani and Nolan McCarthy.  Via the excellent Kevin Lewis.  And yes, yes I know there is much more here than just lobbying expenditures, but that it doesnt show up in that areaisnt supportive.

The post The link between economic concentration and political power? appeared first on Marginal REVOLUTION.

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Ive seen a number of calls lately to place significant liability on the major LLM models and their corporate owners, and so I cover that topic in my latest Bloomberg column.  There are numerous complications, and I cover a mere smidgen of them, but still more analytics are needed here.  Excerpt:

Imagine a bank robbery that is organized through emails and texts. Would the email providers or phone manufacturers be held responsible? Of course not. Any punishment or penalties would be meted out to the criminals

In the case of the bank robbery, the providers of the communications medium or general-purpose technology (i.e., the email account or mobile device) are not the lowest-cost avoiders and have no control over the harm. And since general-purpose technologies such as mobile devices or, more to the point, AI large language models have so many practical uses, the law shouldnt discourage their production with an additional liability burden.

Of course there are many more complications, and I am not saying zero corporate liability is always correct.  But we do need to start with the analytics, and a simple fear of AI-related consequences does settle the matter.  There is this:

On a more practical level, liability assignment to the AI service just isnt going to work in a lot of areas. The US legal system, even when functioning well, is not always able to determine which information is sufficiently harmful. A lot of good and productive information such as teaching people how to generate and manipulate energy can also be used for bad purposes.

Placing full liability on AI providers for all their different kinds of output, and the consequences of those outputs, would probably bankrupt them. Current LLMs can produce a near-infinite variety of content across many languages, including coding and mathematics. If bankruptcy is indeed the goal, it would be better for proponents of greater liability to say so.

Here is a case where partial corporate liability may well make sense:

It could be that there is a simple fix to LLMs that will prevent them from generating some kinds of harmful information, in which case partial or joint liability might make sense to induce the additional safety. If we decide to go this route, we should adopt a much more positive attitude toward AI the goal, and the language, should be more about supporting AI than regulating it or slowing it down. In this scenario, the companies might even voluntarily adopt the...

1. New YouTube channel with interviews of very good (but typically neglected) economists, run by a high school student, Kennedy Owen.

2. Street votes for Ireland.

3. People are more dishonest against big business than small business.

4. Anti-malaria vaccine now approved in both Nigeria and Ghana.

5. A Tulsa story.

6. AI proposals before Congress.

7. Devin Helton.

The post Friday assorted links appeared first on Marginal REVOLUTION.

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Fortunately people hate it because it is wrong, otherwise they would have to hate it for less intellectually honest reasons.  The basic context of course is that native rates of fertility are in irreversible decline.  Here goes:

Immigration is not going so well today in terms of assimilation.  Yet in the future it will go worse yet, because the native-borns will be smaller in number and also older and less energetic.  Nonetheless we need to take in a lot of immigrants today, as a kind of practice, so we can get used to the much greater number of immigrants we will need to take in a generation or two from now.  It is better to be a crummy country than a country of 33,000 people.  And so we must become crummier now, so that later on our rise in crumminess is modestly tempered, though it still will happen.  Open the gates!

See?

The post The pro-immigration argument that everyone hates appeared first on Marginal REVOLUTION.

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Here is one:

Why does writing in the morning (anecdotally so far) seem to be so effective for writers, even ones who are not morning persons? While programmers, which seems like a similar occupation, are invariably owls?

Here is a much longer list.

The post Questions pondered by Gwern appeared first on Marginal REVOLUTION.

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Could AI be used to generate strategic advantage in politics and elections?

Without doubt. We used it to improve prediction of the true critical voters in 2016 (but not to improve the execution of digital marketing, per the Cadwalladr conspiracy) and the true critical voters and true marginal seats in 2019. Competent campaigns everywhere could already, pre-GPT, use AI tools to improve performance.

We did some simple experiments last year to see if you could run synthetic focus groups and synthetic polls inside a LLM. Yes you can. We interrogated synthetic swing voters and synthetic MAGA fans on, for example, Trump running again. Responses are indistinguishable from real people as you might expect. And polling experiments similarly produced results very close to actual polls. Some academic papers have been published showing similar ideas to what we experimented with. There is no doubt that a competent team could use these emerging tools to improve tools for politics and perform existing tasks faster and cheaper. And one can already see this starting (look at who David Shor is hiring).

Its a sign of how fast AI is moving that this idea was new last summer (I first heard it discussed among top people roughly July), we and others tested it, and focus has moved to new ideas without ~100% of those in mainstream politics today having any idea these possibilities exist.

That is from Dominic Cummings (paid) Substack.

The post Using AI in politics appeared first on Marginal REVOLUTION.

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The space race just got a new entrant. Frances Zephalto is offering passengers the chance to travel to the stratosphere in a balloon, starting at 120,000 ($132,000) per person in 2025.

I partnered with the French space agency, and we worked on the concept of the balloon together, says Zephalto founder and aerospace engineer Vincent Farret dAstis.

He tells Bloomberg that hes planning on 60 flights a year, with just six passengers on board each flight. The company aims to provide an experience that brings the best bits of French hospitalityfine food, wine and designto the edges of space for those who can afford the six-figure ticket.

Balloons filled with helium or hydrogen will depart from France with two pilots on board and rise 25 kilometers (15.5 miles) into the stratosphere for 1 1/2 hours. Once at peak altitude, which is about three times higher than for a commercial airliner, the balloon will stay for three hours, giving guests a chance to take in views previously seen only by astronauts. The descent will take a further hour and a half, for a six-hour round trip.

Here is more from Sarah Rappaport at Bloomberg.  Via Daniel Lippman.

The post Almost space markets in everything appeared first on Marginal REVOLUTION.

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1. How much are people spending on dates.

2. Why not buy an abandoned Japanese house?  The price is right (NYT).  Soon they may be cheaper than repeated dating.

3. At the local level, employment concentration is falling.

4. Who is crazier? Me or them? (Ukraine issues)

5. Were Not Going to Die, Robin Hanson video.  And ask the experts: good common sense from Tom Tugendhat, UK security minister, on AI safety.  China, with its vast datasets and fierce determination, is a strong rival.  Keep in mind we need to stay ahead of them for a long while, not just a few years.  The fact that the Chinese might heavily regulate their private sector AI tells you nothing about what their government will do, or if anything it tells you they will emphasize developments in the military direction.

6. Data on female-to-female mentoring.

The post Thursday assorted links appeared first on Marginal REVOLUTION.

A mosquito factory might sound like the last thing youd ever want, but Brazil is constructing a facility capable of producing five billion mosquitoes annually. The twist? The factory will breed mosquitoes carrying a special bacteria that significantly reduces their ability to transmit viruses. As far as I can tell, however, the new mosquitoes still suck your blood.

Nature: The bacterium Wolbachia pipientis naturally infects about half of all insect species. Aedes aegypti mosquitoes, which transmit dengue, Zika, chikungunya and other viruses, dont normally carry the bacterium, however. ONeill and his colleagues developed the WMP mosquitoes after discovering that A. aegypti infected with Wolbachia are much less likely to spread disease. The bacterium outcompetes the viruses that the insect is carrying.

When the modified mosquitoes are released into areas infested with wild A. aegypti, they slowly spread the bacteria to the wild mosquito population.

Several studies have demonstrated the insects success. The most comprehensive one, a randomized, controlled trial in Yogyakarta, Indonesia, showed that the technology could reduce the incidence of dengue by 77%¹, and was met with enthusiasm by epidemiologists.

In Brazil, where the modified mosquitoes have so far been tested in five cities, results have been more modest. In Niteri, the intervention was associated with a 69% decrease of dengue cases². In Rio de Janeiro, the reduction was 38%³.

...

The scholarly impact of academic research matters for academic promotions, influence, relevance to public policy, and others. Focusing on writing style in top-level professional journals, we examine how it changes with age, and how stylistic differences and age affect impact. As top-level scholars age, their writing style increasingly differs from others. The impact (measured by citations) of each contribution decreases, due to the direct effect of age and the much smaller indirect effects through style. Non-native English-speakers write in different styles from others, in ways that reduce the impact of their research. Nobel laureates scholarly writing evinces less certainty about the conclusions of their research than that of other highly productive scholars.

Here is the full NBER paper by Lea-Rachel and Daniel S. Hamermesh.

The post Do older economists write differently? appeared first on Marginal REVOLUTION.

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Motivated by the regional bank crisis of 2023, we model the impact of interest rates on the liquidity risk of banks. Prior work shows that banks hedge the interest rate risk of their assets with their deposit franchise: when interest rates rise, the value of the assets falls but the value of the deposit franchise rises. Yet the deposit franchise is only valuable if depositors remain in the bank. This creates run incentives for uninsured depositors. We show that a run equilibrium is absent at low interest rates but appears when rates rise because the deposit franchise comes to dominate the value of the bank. The liquidity risk of the bank thus increases with interest rates. We provide a formula for the banks optimal risk management policy. The bank should act as if its deposit rate is more sensitive to market rates than it really is, i.e., as if its deposit beta is higher. This leads the bank to shrink the duration of its assets. Shortening duration has a downside, however: it exposes the bank to insolvency if interest rates fall. The bank thus faces a dilemma: it cannot simultaneously hedge its interest rate risk and liquidity risk exposures. The dilemma disappears only if uninsured deposits do not contribute to the deposit franchise (if they have a deposit beta of one). The recent growth of low-beta uninsured checking and savings accounts thus poses stability risks to banks. The risks increase with interest rates and are amplified by other exposures such as credit risk. We show how they can be addressed with an optimal capital requirement that rises with interest rates.

That is from a new paper by Itamar Drechsler, Alexi Savov, Philipp Schnabl, and Olivier Wang.

The post The dilemma of 2023 banking, in a nutshell appeared first on Marginal REVOLUTION.

 &#...

1. Scott Aronson with some AGI risk sanity.

2. The revise and resubmit process in economics.

3. A mayor in South Korea is under fire for dumping tons of garbage on an area beach so that volunteer clean-up crews had something to remove.

4. Taylor Swift did due diligence on FTX.

5. Haiti fact of the day: Ticket from Miami to Port-au-Prince: $124 Ticket from Port-au-Prince to Miami: $1,000-3,000

6. Magnus playing poker (WSJ).

The post Wednesday assorted links appeared first on Marginal REVOLUTION.

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A very good episode, here is the audio, video, and transcript.  Here is part of the episode summary:

Tyler sat down with Anna to discuss the most plausible scenario where England couldve remained a republic in the 17th century, what Robert Boyle learned from Sir William Petty, why some monarchs build palaces and other dont, how renting from the Landmark Trust compares to Airbnb, how her job changes her views on wealth taxes, why neighborhood architecture has declined, how shed handle the UKs housing shortage, why giving back the Koh-i-Noor would cause more problems than it solves, why British houses have so little storage, the hardest part about living in an 800-year-old house, her favorite John Fowles book, why we should do more to preserve the Scottish Enlightenment, and more.

And here is one excerpt:

COWEN: Which are the old buildings that we have too many of in Britain? Theres a lot of Christopher Wren churches. I think theres over 20.

KEAY: Too many?

COWEN: What if they were 15? Theyre not all fantastic.

KEAY: Theyre not all fantastic? Tell me one that isnt fantastic.

COWEN: The Victorians knocked down St. Mildred. Ive seen pictures of it. I dont miss it.

KEAY: Well, you dont miss something thats not there. I think itd be pretty hard to convince me that any Christopher Wren church wasnt worth hanging on to. But your point is right, which is to say that not everything that was ever built is worth retaining. There are things which are clearly of much less interest or were poorly built, which are not serving a purpose anymore in a way that they need to. To me, its all about assessing what matters, what we care about.

Its incredibly important to remember how you have to try and take the long view because if you let things go, you cannot later retrieve them. We look at the decisions that were made in the past about things that we really care about that were demolishedwonderful country houses, weve mentioned. Its fantastic, for example,...