Tag Archives: knowledge
#437816 As Algorithms Take Over More of the ...
Algorithms play an increasingly prominent part in our lives, governing everything from the news we see to the products we buy. As they proliferate, experts say, we need to make sure they don’t collude against us in damaging ways.
Fears of malevolent artificial intelligence plotting humanity’s downfall are a staple of science fiction. But there are plenty of nearer-term situations in which relatively dumb algorithms could do serious harm unintentionally, particularly when they are interlocked in complex networks of relationships.
In the economic sphere a high proportion of decision-making is already being offloaded to machines, and there have been warning signs of where that could lead if we’re not careful. The 2010 “Flash Crash,” where algorithmic traders helped wipe nearly $1 trillion off the stock market in minutes, is a textbook example, and widespread use of automated trading software has been blamed for the increasing fragility of markets.
But another important place where algorithms could undermine our economic system is in price-setting. Competitive markets are essential for the smooth functioning of the capitalist system that underpins Western society, which is why countries like the US have strict anti-trust laws that prevent companies from creating monopolies or colluding to build cartels that artificially inflate prices.
These regulations were built for an era when pricing decisions could always be traced back to a human, though. As self-adapting pricing algorithms increasingly decide the value of products and commodities, those laws are starting to look unfit for purpose, say the authors of a paper in Science.
Using algorithms to quickly adjust prices in a dynamic market is not a new idea—airlines have been using them for decades—but previously these algorithms operated based on rules that were hard-coded into them by programmers.
Today the pricing algorithms that underpin many marketplaces, especially online ones, rely on machine learning instead. After being set an overarching goal like maximizing profit, they develop their own strategies based on experience of the market, often with little human oversight. The most advanced also use forms of AI whose workings are opaque even if humans wanted to peer inside.
In addition, the public nature of online markets means that competitors’ prices are available in real time. It’s well-documented that major retailers like Amazon and Walmart are engaged in a never-ending bot war, using automated software to constantly snoop on their rivals’ pricing and inventory.
This combination of factors sets the stage perfectly for AI-powered pricing algorithms to adopt collusive pricing strategies, say the authors. If given free reign to develop their own strategies, multiple pricing algorithms with real-time access to each other’s prices could quickly learn that cooperating with each other is the best way to maximize profits.
The authors note that researchers have already found evidence that pricing algorithms will spontaneously develop collusive strategies in computer-simulated markets, and a recent study found evidence that suggests pricing algorithms may be colluding in Germany’s retail gasoline market. And that’s a problem, because today’s anti-trust laws are ill-suited to prosecuting this kind of behavior.
Collusion among humans typically involves companies communicating with each other to agree on a strategy that pushes prices above the true market value. They then develop rules to determine how they maintain this markup in a dynamic market that also incorporates the threat of retaliatory pricing to spark a price war if another cartel member tries to undercut the agreed pricing strategy.
Because of the complexity of working out whether specific pricing strategies or prices are the result of collusion, prosecutions have instead relied on communication between companies to establish guilt. That’s a problem because algorithms don’t need to communicate to collude, and as a result there are few legal mechanisms to prosecute this kind of collusion.
That means legal scholars, computer scientists, economists, and policymakers must come together to find new ways to uncover, prohibit, and prosecute the collusive rules that underpin this behavior, say the authors. Key to this will be auditing and testing pricing algorithms, looking for things like retaliatory pricing, price matching, and aggressive responses to price drops but not price rises.
Once collusive pricing rules are uncovered, computer scientists need to come up with ways to constrain algorithms from adopting them without sacrificing their clear efficiency benefits. It could also be helpful to make preventing this kind of collusive behavior the responsibility of the companies deploying them, with stiff penalties for those who don’t keep their algorithms in check.
One problem, though, is that algorithms may evolve strategies that humans would never think of, which could make spotting this behavior tricky. Imbuing courts with the technical knowledge and capacity to investigate this kind of evidence will also prove difficult, but getting to grips with these problems is an even more pressing challenge than it might seem at first.
While anti-competitive pricing algorithms could wreak havoc, there are plenty of other arenas where collusive AI could have even more insidious effects, from military applications to healthcare and insurance. Developing the capacity to predict and prevent AI scheming against us will likely be crucial going forward.
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#437763 Peer Review of Scholarly Research Gets ...
In the world of academics, peer review is considered the only credible validation of scholarly work. Although the process has its detractors, evaluation of academic research by a cohort of contemporaries has endured for over 350 years, with “relatively minor changes.” However, peer review may be set to undergo its biggest revolution ever—the integration of artificial intelligence.
Open-access publisher Frontiers has debuted an AI tool called the Artificial Intelligence Review Assistant (AIRA), which purports to eliminate much of the grunt work associated with peer review. Since the beginning of June 2020, every one of the 11,000-plus submissions Frontiers received has been run through AIRA, which is integrated into its collaborative peer-review platform. This also makes it accessible to external users, accounting for some 100,000 editors, authors, and reviewers. Altogether, this helps “maximize the efficiency of the publishing process and make peer-review more objective,” says Kamila Markram, founder and CEO of Frontiers.
AIRA’s interactive online platform, which is a first of its kind in the industry, has been in development for three years.. It performs three broad functions, explains Daniel Petrariu, director of project management: assessing the quality of the manuscript, assessing quality of peer review, and recommending editors and reviewers. At the initial validation stage, the AI can make up to 20 recommendations and flag potential issues, including language quality, plagiarism, integrity of images, conflicts of interest, and so on. “This happens almost instantly and with [high] accuracy, far beyond the rate at which a human could be expected to complete a similar task,” Markram says.
“We have used a wide variety of machine-learning models for a diverse set of applications, including computer vision, natural language processing, and recommender systems,” says Markram. This includes simple bag-of-words models, as well as more sophisticated deep-learning ones. AIRA also leverages a large knowledge base of publications and authors.
Markram notes that, to address issues of possible AI bias, “We…[build] our own datasets and [design] our own algorithms. We make sure no statistical biases appear in the sampling of training and testing data. For example, when building a model to assess language quality, scientific fields are equally represented so the model isn’t biased toward any specific topic.” Machine- and deep-learning approaches, along with feedback from domain experts, including errors, are captured and used as additional training data. “By regularly re-training, we make sure our models improve in terms of accuracy and stay up-to-date.”
The AI’s job is to flag concerns; humans take the final decisions, says Petrariu. As an example, he cites image manipulation detection—something AI is super-efficient at but is nearly impossible for a human to perform with the same accuracy. “About 10 percent of our flagged images have some sort of problem,” he adds. “[In academic publishing] nobody has done this kind of comprehensive check [using AI] before,” says Petrariu. AIRA, he adds, facilitates Frontiers’ mission to make science open and knowledge accessible to all. Continue reading