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James_Miller comments on Request for help with economic analysis related to AI forecasting - Less Wrong Discussion

6 Post author: ESRogs 06 February 2016 01:27AM

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Comment author: James_Miller 06 February 2016 02:08:33AM 1 point [-]

Here is a simple model that might be useful. You make and sell good G at price g per unit. You make it using inputs X and Y with, say, a production function G=(X^a)(Y^b) where X is how much of one input you use and Y how much of the other. The cost of each unit of X is x, and the cost of each unit of Y is y.

So your goal is to pick X and Y to maximize (X^a)(Y^b)g-Xx-Yx. You want to know how xX/(xX+yY) changes as a and x change.