Ajay Agrawal - Prediction Machines: The Simple Economics of Artificial Intelligence

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Copyright 2018 Ajay Agrawal, Joshua Gans, Avi Goldfarb

All rights reserved

No part of this publication may be reproduced, stored in or introduced into a retrieval system, or transmitted, in any form, or by any means (electronic, mechanical, photocopying, recording, or otherwise), without the prior permission of the publisher. Requests for permission should be directed to permissions@hbsp.harvard.edu, or mailed to Permissions, Harvard Business School Publishing, 60 Harvard Way, Boston, Massachusetts 02163.

First eBook Edition: Apr 2018

ISBN: 978-1-63369-567-2

eISBN: 978-1-63369-568-9

To our families, colleagues, students, and startups who inspired us to think clearly and deeply about artificial intelligence.

We express our thanks to the people who contributed to this book with their time, ideas, and patience. In particular, we thank Abe Heifets of Atomwise, Liran Belanzon of BenchSci, Alex Shevchenko of Grammarly, Marc Ossip, and Ben Edelman for the time they spent with us in interviews, as well as Kevin Bryan for his comments on the overall manuscript. Also, we thank our colleagues for discussions and feedback, including Nick Adams, Umair Akeel, Susan Athey, Naresh Bangia, Nick Beim, Dennis Bennie, James Bergstra, Dror Berman, Vincent Brub, Jim Bessen, Scott Bonham, Erik Brynjolfsson, Andy Burgess, Elizabeth Caley, Peter Carrescia, Iain Cockburn, Christian Catalini, James Cham, Nicolas Chapados, Tyson Clark, Paul Cubbon, Zavain Dar, Sally Daub, Dan Debow, Ron Dembo, Helene Desmarais, JP Dube, Candice Faktor, Haig Farris, Chen Fong, Ash Fontana, John Francis, April Franco, Suzanne Gildert, Anindya Ghose, Ron Glozman, Ben Goertzel, Shane Greenstein, Kanu Gulati, John Harris, Deepak Hegde, Rebecca Henderson, Geoff Hinton, Tim Hodgson, Michael Hyatt, Richard Hyatt, Ben Jones, Chad Jones, Steve Jurvetson, Satish Kanwar, Danny Kahneman, John Kelleher, Moe Kermani, Vinod Khosla, Karin Klein, Darrell Kopke, Johann Koss, Katya Kudashkina, Michael Kuhlmann, Tony Lacavera, Allen Lau, Eva Lau, Yann LeCun, Mara Lederman, Lisha Li, Ted Livingston, Jevon MacDonald, Rupam Mahmood, Chris Matys, Kristina McElheran, John McHale, Sanjog Misra, Matt Mitchell, Sanjay Mittal, Ash Munshi, Michael Murchison, Ken Nickerson, Olivia Norton, Alex Oettl, David Ossip, Barney Pell, Andrea Prat, Tomi Poutanen, Marzio Pozzuoli, Lally Rementilla, Geordie Rose, Maryanna Saenko, Russ Salakhutdinov, Reza Satchu, Michael Serbinis, Ashmeet Sidana, Micah Siegel, Dilip Soman, John Stackhouse, Scott Stern, Ted Sum, Rich Sutton, Steve Tadelis, Shahram Tafazoli, Graham Taylor, Florenta Teodoridis, Richard Titus, Dan Trefler, Catherine Tucker, William Tunstall-Pedoe, Stephan Uhrenbacher, Cliff van der Linden, Miguel Villas-Boas, Neil Wainwright, Boris Wertz, Dan Wilson, Peter Wittek, Alexander Wong, Shelley Zhuang, and Shivon Zilis. We also thank Carl Shapiro and Hal Varian for their book Information Rules , which served as a source of inspiration for our project. The Creative Destruction Lab and Rotman School staffs have been fantastic, particularly Steve Arenburg, Dawn Bloomfield, Rachel Harris, Jennifer Hildebrandt, Anne Hilton, Justyna Jonca, Aidan Kehoe, Khalid Kurji, Mary Lyne, Ken McGuffin, Shray Mehra, Daniel Mulet, Jennifer OHare, Gregory Ray, Amir Sariri, Sonia Sennik, Kristjan Sigurdson, Pearl Sullivan, Evelyn Thomasos, and the rest of the Lab team and Rotman staff. We thank our dean, Tiff Macklem, for his enthusiastic support of our work on AI at the Creative Destruction Lab and throughout the Rotman School. Thanks also to the leadership and staff at The Next 36 and The Next AI. We also thank Walter Frick and Tim Sullivan for stellar editing, as well as our agent, Jim Levine. Many of the ideas in the book build on research supported by the Social Sciences and Humanities Research Council of Canada, the Vector Institute, the Canadian Institute for Advanced Research under the leadership of Alan Bernstein and Rebecca Finlay, and the Sloan Foundation with Danny Goroffs support under the Economics of Digitization grant, managed by Shane Greenstein, Scott Stern, and Josh Lerner. We are grateful for their support. We also thank Jim Poterba for his support of our conference on the economics of AI through the National Bureau of Economic Research. Finally, we thank our families for their patience and contributions during this process: Gina, Amelia, Andreas, Rachel, Anna, Sam, Ben, Natalie, Belanna, Ariel, Annika.