I’m @froztbyte more or less everywhere that matters

  • 10 Posts
  • 38 Comments
Joined 3 years ago
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Cake day: July 2nd, 2023

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  • so there’s a new nber econometrics paper out, covering our favourite industry

    it has some bangers in it

    Paid adoption is substantially more common among younger and higher-income consumers: those earning more than $200,000 per year are 1.7 times as likely to pay as those earning less than $50,000, and those younger than 55 are 1.8 times as likely as those aged 55 or older

    starting strong!

    This force creates a dynamic incentive to set lower prices today: lower prices attract more users, improving future model quality and raising future demand

    I don’t entirely follow how setting lower prices today improves future model quality but sure I’ll go along with the ride

    Despite this limited horizontal differentiation, we find some degree of vertical differentiation across providers, consistent with observed market shares. At the end of our sample, the average consumer was willing to pay a $10 monthly premium for OpenAI products relative to Anthropic products. Part of this difference reflects model quality: our estimates indicate that consumers are willing to pay more for higher-quality models. For instance, moving from GPT-4’s capability level to GPT-5.5 Pro’s raises average willingness to pay for OpenAI products by approximately $25 per month

    We also use the model to examine how consumer preferences for AI services shape competition. We begin by considering substitutability across services. By the end of our sample, all pairs of AI services are substitutes on average

    “do you want tea or coffee?” “yes”

    OpenAI has the highest retention of all AI products we study, with 77% of people still paying after one month, 65% after three months, and 55% after six months. Anthropic and xAI are lower, but similar to each other: around 65%, 50%, and 40% after one, three, and six months,

    in the words of basement jaxx, down down downdown down downdown downdown

    chat is it good when your world changing ai god keeps not getting picked for anyone’s team during lunch football