WSJ: “Game theory is a branch of mathematics that expresses decision-based scenarios in a game-like format, which allows mathematical techniques to be used to study strategies and outcomes. The usual setup is that there are a number of players, each of whom has a fixed set of possible moves, and each combination of moves from different players produces a predetermined outcome. The outcome might just be win, lose or draw, as in a simple game like tic-tac-toe. It might be a numerical payoff, as in a gambling or investment-type situation. Or it might be a notional payoff, so that good and bad outcomes can be quantified rather than being black and white. Basic games involve just two participants, each of whom has the same two possible moves. The game of “chicken” is one such game, in which two people are approaching each other head on and will collide if nobody moves out of the way. Each player then has two choices: swerve or keep going straight ahead. It might seem rational to always swerve to avoid the collision, but game theory demonstrates that there is no clear-cut best (or “dominant”) strategy that maximizes results in both cases, because if your opponent swerves, you have swerved for no reason.”
Ruchir Sharma: “I argue that the creative-destruction fiber of the economy, which is the essence of capitalism, is not being freed by noncapitalist interventions. Instead, we must focus on raising productivity, because that’s the only way to grow the overall pie and spend on so many of these priorities. The way to begin growing productivity is to allow capitalism to work again. Currently, we aren’t allowing capital to work in its full form. We distort it with so many interventions. The government’s role is in every sphere—helping the incumbents and the entrenched. That goes against the productive capacity of smaller businesses, which generally tend to have higher productivity.”
Devangshu Dutta: “Starting with demonetisation and the goods and services tax (GST), policy changes have led to a shrinking of the informal economy. This has shown up in the micro, small and medium enterprises sector, which has shrunk in size, and struggled to generate enough activity to provide employment. That is why unemployment trumped religion in resonance in the elections. Demonetisation and GST have also led to formalisation, and I suspect the formalisation masked the extent to which the informal economy compressed…The informal businesses that could transition to GST did so and joined the formal economy. This resulted in a bump-up in formal GDP data, while the shutdowns of informal businesses have shown up in unemployment, rural distress, and a K-shaped recovery.”
Wired: “In 2016, Google engineer Illia Polosukhin had lunch with a colleague, Jacob Uszkoreit. Polosukhin had been frustrated by a lack of progress in his project, using AI to provide useful answers to questions posed by users, and Uszkoreit suggested he try a technique he had been brainstorming that he called self-attention. Thus began an 8-person collaboration that ultimately resulted in a 2017 paper called “Attention Is All You Need,” which introduced the concept of transformers as a way to supercharge artificial intelligence. It changed the world. Eight years later, though, Polosukhin is not completely happy with the way things are shaking out. A big believer in open source, he’s concerned about the secretive nature of transformer-based large language models, even from companies founded on the basis of transparency. (Gee, who can that be?) We don’t know what they’re trained on or what the weights are, and outsiders certainly can’t tinker with them…As LLM technology improves, he worries it will get more dangerous, and that the need for profit will shape its evolution. “Companies say they need more money so they can train better models. Those models will actually be better at manipulating people, and you can tune them better for generating revenue,” he says.”
