Related papers: Proxyeconomics, the inevitable corruption of proxy…
Today, there is no clear legal test for regulating the use of variables that proxy for race and other protected classes and classifications. This Article develops such a test. Decision tools that use proxies are narrowly tailored when they…
The hypothesis that living systems can benefit from operating at the vicinity of critical points has gained momentum in recent years. Criticality may confer an optimal balance between exceedingly ordered and too noisy states. We here…
While much research focused on producing explanations, it is still unclear how the produced explanations' quality can be evaluated in a meaningful way. Today's predominant approach is to quantify explanations using proxy scores which…
We consider a simple model of rational agents competing in a single product market described by simple linear demand curve. Contrary to accepted economic theory, the agents' production levels synchronise in the absence of conscious…
In a market system, regulations are designed to prevent or rectify market failures that inhibit fair exchange, such as monopoly or transactions with hidden costs. Because regulations reduce profits to those possessing unfair advantage,…
The origin of economic crises is a key problem for economics. We present a model of long-run competitive markets to show that the multiplicity of behaviors in an economic system, over a long time scale, emerge as statistical regularities…
I prove that competitive market outcomes require computational intractability. If P = NP, firms can efficiently solve the collusion detection problem, identifying deviations from cooperative agreements in complex, noisy markets and thereby…
Purchase data from retail chains provide proxy measures of private household expenditure on items that are the most troublesome to collect in the traditional expenditure survey. Due to the sheer amount of proxy data, the bias due to…
We provide the first formal definition of reward hacking, a phenomenon where optimizing an imperfect proxy reward function leads to poor performance according to the true reward function. We say that a proxy is unhackable if increasing the…
We have used agent-based modeling as our numerical method to artificially simulate a dynamic real economy where agents are rational maximizers of an objective function of Cobb-Douglas type. The economy is characterised by heterogeneous…
Studying corruption presents unique challenges. Recent work in the spirit of computational social science exploits newly available data and methods to give a fresh perspective on this important topic. In this chapter we highlight some of…
There are several distinct failure modes for overoptimization of systems on the basis of metrics. This occurs when a metric which can be used to improve a system is used to an extent that further optimization is ineffective or harmful, and…
We model competition on a credence goods market governed by an imperfect label, signaling high quality, as a rank-order tournament between firms. In this market interaction, asymmetric firms jointly and competitively control the aggregate…
A recent literature considers causal inference using noisy proxies for unobserved confounding factors. The proxies are divided into two sets that are independent conditional on the confounders. One set of proxies are `negative control…
We present a linear agent based model on brand competition. Each agent belongs to one of the two brands and interacts with its nearest neighbors. In the process the agent can decide to change to the other brand if the move is beneficial.…
Implementing a reward function that perfectly captures a complex task in the real world is impractical. As a result, it is often appropriate to think of the reward function as a proxy for the true objective rather than as its definition. We…
The emergence and wide-spread use of online social networks has led to a dramatic increase on the availability of social activity data. Importantly, this data can be exploited to investigate, at a microscopic level, some of the problems…
There is growing concern about tacit collusion using algorithmic pricing, and regulators need tools to help detect the possibility of such collusion. This paper studies how to design a hypothesis testing framework in order to decide whether…
Who should we prioritize for treatment when causal effects cannot be estimated? In practice, organizations often rely on predictive proxies: ads are targeted using purchase probabilities, and retention incentives are allocated using…
How does competition in markets for information affect the creation and division of surplus? We study this question in a search environment in which an agent searches sequentially for a high-quality good and learns about the quality of…