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bad-at-optimizing consumers
my lowkey-crazy take here is that personal-finance AI agents will do precisely this... forcing that number up toward, basically, where the rent/added benefit to company running the scheme isn't worth it anymore
I'm not convinced that AI can't be tricked into suboptimal behavior too
true... but why would my personal-finance app trick me into suboptimal behavior? (I suppose if it's all integrated/same bank etc then yeah, OK).
But quite often my payment app (=Revolut) and I are pretty aligned in our interests. (I had a full paragraph recounting a story w RevolutPay etc, and their fake points, but I took it out from this post).
...or I just cross-run my agents, right; like, give one access/permission to act on the other's. I dunno, I'm dreaming, I guess
I fully expect to see some problems due to underestimating how many biases are unknowingly loaded into these models.
presumably even the ignorant, bad-at-optimizing consumers will benefit from the marginal, highly optimizing users who are jumping to the best points plans.
Not necessarily, because the selection pressure is for the plans that most benefit the optimizers, who behave differently than the non-optimizers.
Markets like this can have goofy equilibrium conditions.
Markets like this can have goofy equilibrium conditions.
tell us more?
It’s been a while since I studied information and uncertainty stuff, but you can tell things will start breaking if competitors cause the population to sort by type.
The optimizers in a pool by themselves have no surplus to harvest, so they either try to eat each other or rewards die.
If the non-optimizers were split into their own pool, you’d expect those companies to take advantage of the unwillingness to optimize by introducing some sort of higher prices, which creates a new opportunity to sell rewards to the optimizers.
No pure strategy equilibrium, basically? Like where the best responses result in cyclic behavior?
Depends heavily on the assumptions. I think you could have a stable equilibrium with sufficient search costs or biased beliefs about one’s ability to optimize.
If competition is able to drive this up, presumably even the ignorant, bad-at-optimizing consumers will benefit from the marginal, highly optimizing users who are jumping to the best points plans.
But it would be much better if we could transfer points and trade them on an open market. Why isnt there some crypto bro trying to put credit card points on the blockchain?