Mediating artificial intelligence developments through negative and positive incentives

The field of Artificial Intelligence (AI) is going through a period of great expectations, introducing a certain level of anxiety in research, business and also policy. This anxiety is further energised by an AI race narrative that makes people believe they might be missing out. Whether real or not, a belief in this narrative may be detrimental as some stake-holders will feel obliged to cut corners on safety precautions, or ignore societal consequences just to “win”. Starting from a baseline model that describes a broad class of technology races where winners draw a significant benefit compared to others (such as AI advances, patent race, pharmaceutical technologies), we investigate here how positive (rewards) and negative (punishments) incentives may beneficially influence the outcomes. We uncover conditions in which punishment is either capable of reducing the development speed of unsafe participants or has the capacity to reduce innovation through over-regulation. Alternatively, we show that, in several scenarios, rewarding those that follow safety measures may increase the development speed while ensuring safe choices. Moreover, in the latter regimes, rewards do not suffer from the issue of over-regulation as is the case for punishment. Overall, our findings provide valuable insights into the nature and kinds of regulatory actions most suitable to improve safety compliance in the contexts of both smooth and sudden technological shifts.

Does Winning a Patent Race lead to more follow-on Innovation?

Competition between firms to invent and patent an idea, or “patent racing,” has been much discussed in theory, but seldom analyzed empirically and never at scale. This article introduces an empirical way to identify patent races, and provides the first broad-based view of them in the real world. It reveals that patent races are common, particularly in information-technology fields. The article then analyzes the effect of winning a patent race, showing that patent race winners do significantly more follow-on innovation, and their follow-on research is more similar to what was covered by the patent. (JEL CODES: O34, O32, O31)

Believe It or Not: Strategic Licensing Makes R&D Alliance Profitable

We consider a market where firms (that compete in the product market) invest in the research and development (R&D) activities with no guaranteed success and engage in a patent race for intellectual property rights. We analyze the effects of a strategic (ex ante) licensing contract on the equilibrium investment behavior of competing firms that form a research and development (R&D) alliance to win a patent race. We show that the R&D alliance members that sign strategic licensing contract invest more in the R&D and earn higher expected profits compared to the firms in an R&D cartel and R&D joint venture cartel without any strategic licensing as well as the firms that aggressively compete in the innovation market to win the patent race.

Excessive deliberation in social anxiety

A goal of computational psychiatry is to ground symptoms in more fundamental computational mechanisms. Theory suggests that rumination and other symptoms in mood disorders reflect dysregulated mental simulation, a process that normally serves to evaluate candidate actions. If so, these covert symptoms should have observable consequences: excessively deliberative choices, specifically about options related to the content of rumination. In two large general population samples, we examined how symptoms of social anxiety disorder (SAD) predict choices in a socially framed reinforcement learning task, the Patent Race game. Using a computational learning model to assess learning strategy, we found that self-reported social anxiety was indeed associated with an increase in deliberative evaluation. The effect was specific to learning from a particular (“upward counterfactual”) subset of feedback, broadly matching the biased content of rumination in SAD. It was also robust to controlling for other psychiatric symptoms. These results ground the symptoms of SAD, such as overthinking and paralysis in social interactions, in well characterized neuro-computational mechanisms and offer a rare example of enhanced function in disease