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No. I'm stating where the paper's assumptions are clearly violated. AI companies are intentionally trying to monopolize the supply of inputs needed for R&D. Th
by ok123456 4mo ago
No. I'm stating where the paper's assumptions are clearly violated.
AI companies are intentionally trying to monopolize the supply of inputs needed for R&D. This violates homogeneity of degree 1.
- gwerbin 4mo agoIsn't this true in a lot of situations? Basically anytime maximum production capacity of an input is limited, or scale-up time is very long, firms are large relative to the supply so they are not price takers.
- curio_Pol_curio 4mo agoPP's point has (mostly?) been addressed in https://www.aeaweb.org/articles?id=10.1257/mac.20180386 https://www.aeaweb.org/articles?id=10.1257/mac.20180386 Inputs that can be monopolized are manifestly _not_ the intangibles; price-taking is independent of their effect
- gwerbin 4mo agoI don't think they implied that those inputs are the intangibles, only that the functional form assumption in the 2018 paper is unrealistic.