Intergenerational experimentation and catastrophic risk
Fikri Pitsuwan (Center of Economic Research, ETH Zurich)
GPI Working Paper No. 6 - 2022
I study an intergenerational game in which each generation experiments on a risky technology that provides private benefits, but may also cause a temporary catastrophe. I find a folk-theorem-type result on which there is a continuum of equilibria. Compared to the socially optimal level, some equilibria exhibit too much, while others too little, experimentation. The reason is that the payoff externality causes preemptive experimentation, while the informational externality leads to more caution. Remarkably, for a particular temporal discount rate, there exists an optimal equilibrium in which the behavior of two-period-lived agents align with that of an infinitely-lived social planner. In a model with a political process, unequal political power, biased towards the young, supports an optimal equilibrium most often. Extensions include finite horizon, irreversible catastrophes, and risk-aversion.
Other working papers
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The notion of existential catastrophe is increasingly appealed to in discussion of risk management around emerging technologies, but it is not completely clear what this notion amounts to. Here, I provide an opinionated survey of the space of plausibly useful definitions of existential catastrophe. Inter alia, I discuss: whether to define existential catastrophe in ex post or ex ante terms, whether an ex ante definition should be in terms of loss of expected value or loss of potential…
How to resist the Fading Qualia Argument – Andreas Mogensen (Global Priorities Institute, University of Oxford)
The Fading Qualia Argument is perhaps the strongest argument supporting the view that in order for a system to be conscious, it does not need to be made of anything in particular, so long as its internal parts have the right causal relations to each other and to the system’s inputs and outputs. I show how the argument can be resisted given two key assumptions: that consciousness is associated with vagueness at its boundaries and that conscious neural activity has a particular kind of holistic structure. …
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We propose an empirical approach to identify and measure AI-driven shocks based on the co-movements of relevant financial asset prices. For that purpose, we first calculate the common volatility of the share prices of major US AI-relevant companies. Then we isolate the events that shake this industry only from those that shake all sectors of economic activity at the same time. For the sample analysed, AI shocks are identified when there are announcements about (mergers and) acquisitions in the AI industry, launching of…