May 24, 2025 6 min read Links

Links: Week of 25 May 2025

A long list today because this week two of my top sources were on fire - MR and NYT.

  1. An interviewer just asked me what skills AI will make more important. My response? Critical thinking skills.

    This is because in the past there was value in creating large quantities of information. That is now costless. The new currency is how to generate, assimilate, interpret, and make that large amount of information actionable.

    The next question then becomes how do we teach, and improve our own, critical thinking skills? I discuss that in a recent study where I create a critical thinking skills hierarchy.

  2. The problem, as both I and Patel noted, is that this ecosystem depends on humans seeing those webpages, not impersonal agents impervious to advertising, which destroys the economics of ad-supported content sites, which, in the long run, dries up the supply of new content for AI.

    A potential solution:

    First, the protocol layer should have a mechanism for payments via digital currency, i.e. stablecoins. Second, AI providers like ChatGPT should build an auction mechanism that pays out content sources based on the frequency with which they are cited in AI answers. The result would be a new universe of creators who will be incentivized to produce high quality content that is more likely to be useful to AI, competing in a marketplace a la the open web; indeed, this would be the new open web, but one that operates at even greater scale than the current web given the fact that human attention is a scarce resource, while the number of potential agents is infinite.

  3. “We still haven’t done hot dogs,” Teddy said. Billy agreed: Hot dogs should be an editorial priority.

    and

“We were still very young; we had no idea what we were doing,” said Billy, a junior varsity quarterback whose hair was tousled into a cruciferous mop.

  1. …Use of digital technologies was associated with reduced risk of cognitive impairment (OR = 0.42, 95% CI 0.35–0.52) and reduced time-dependent rates of cognitive decline (HR = 0.74, 95% CI 0.66–0.84). Effects remained significant when accounting for demographic, socioeconomic, health and cognitive reserve proxies.

    Paper here.

  2. What are the welfare effects of surge pricing? Using Uber data, I develop an empirical model of spatial equilibrium composed of demand, supply, and matching. I find that surge pricing raises total welfare, benefitting riders but hurting drivers.

    Welfare effects differ substantially across sides of the market: rider surplus increases by 3.57% of gross revenue, whereas driver surplus and the platform’s current profits decrease by 0.98% and 0.50% of gross revenue, respectively.

    This doesn't make sense. If it hurts the platform or the drivers, why would they do it?

    After dropping the pearl of wisdom above, I decided to actually read the paper. In the first two pages I found this:

Uber’s current profits decrease by 0.50% of gross revenue. This probably does not mean that Uber is hurt, but rather that it is willing to forgo current profits to increase rider surplus—the right choice if it believes that long-run shareholder value is more closely tied to rider surplus and customer retention than to current profits.

Makes sense. After this my eyes glazed over and I dropped the paper in Claude and asked it why drivers would participate in this. Here's what it says: 

The paper acknowledges this is the more problematic finding. "My findings suggest that drivers might have good reason to complain. Their hourly earnings are not much higher than the minimum wage, so even the small effects I find might be a concern."

However, drivers may not have full information about the counterfactual (uniform pricing), and many drivers are part-time workers using Uber for supplemental income rather than as their primary employment.

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