Discussion about this post

User's avatar
Marc-Henri Hurt's avatar

Hello Jessica,

Brilliant, extraordinary assimilation of knowledge ! But I approve more of linguistic analysis, and more particularly the very inspired grammatical analysis, than economic analysis.

I had already seen the name of Akerlof, but it seems logical to me that sellers (of lemons) know more (about lemons) than consumers, even if consumers have made a lot of progress. It reminds me of a microeconomics class where I asked a rather well-known professor presenting a simplistic theory of markets, where sellers and buyers set the right price based on perfectly distributed information (perhaps inspired by Walras), what influence did advertising have on consumer information. It was late and he had promised to respond the next day, but he never did.

Akerlof's theory is therefore the opposite since it highlights information asymmetries, but his example seems a bit specious to me, although there may have been such cases in the United States at the time he described this mechanism. It’s nevertheless very smart of you to have invoked it because there is a great deal of opacity about the way models work, but even for suppliers :). That is why they cannot commit to consistency.

Moreover, the increase in the size of context windows initially responded to a pressing demand from users and offered them a clear pricing advantage (price per token, for example between GPT-5.2 and GPT-5.4), even if it is an incentive to consume.

On the other hand, suppliers may not have an interest in bearing "context rot" for too long because if one does not know their economic model, it seems that they themselves bear most of the cost. And the market might move towards more economical and efficient solutions in a « context » where everyone tinkers, as you mentioned just before the conclusion.

Zane Hall's avatar

"Context rot" - thanks for the new word! Really helpful "big picture" perspective.

A simple takeaway - context will always get added, somewhere, by the user, by the model, or somewhere in between. How well it's managed (a rarity) determines the cost and reliability. Does that make sense?

One more random takeaway - "reports" in the BI world seem equivalent to "prompts" in the AI world. A good BI solution reduces report logic by pushing consensus business logic lower in the architecture. It's a metaphor :)

ZH

6 more comments...

No posts

Ready for more?