Economic policy is a very complex field, and current economic models are often unable to accurately
predict the effects of economic policy decisions. Human policy-makers are tasked with understanding the
immediate implication of individual policies, but also their long-term effects and their interactions with
other policies. Furthermore, these policy-makers are often subject to bias from lobbyists or their own
re-election campaigns. We believe that artificial intelligence represents an opportunity to ensure that
economic policy is aligned with the goals of the general population, as well as better managing the
information necessary to make these decisions. Thus, our work offers a framework in which AI is in a
position to make better informed, unbiased policy decisions.
Figure 1: The proposed framework. In the Inner Simulation, there are several players
in an environment.
You can imagine each player as a simulated person, and the environment to be some video game. Each
player
wants to do as well as possible in the game by maximizing their score. After the Inner Simulation has
run
for some time, the players vote, giving their preferences on the rules of the game. The Principal takes
all of these votes, and makes new rules for the game. With the new rules for the game, the Inner
Simulation runs until it becomes time to vote again. Then, the process continues.
As an example, let’s picture the Inner Simulation as the game Pac-Man, where Pac-Man and all of the
ghosts are the players, and the environment is the maze and all of the pellets. It’s important to note
that no actual people are controlling any of the players — Pac-Man moves around on his own, just like
the ghosts. Remember that the goal of each player is to get a higher score: Pac-Man gets a higher score
by eating more pellets, and the ghosts get higher scores by catching Pac-Man. Pac-Man and the ghosts
play in the Inner Simulation for a while, until it becomes time to vote. At that point, they all report
their preferences about the Inner Simulation — Pac-Man’s preference might be for more pellets, and
ghosts might report their preference to be able to move faster. All of these votes are considered by the
Principal — in this example, we can think of the Principal as the person who coded the Pac-Man game. The
Principal looks at all of the votes and changes the rules of the Pac-Man game. Then, the new Inner
Simulation runs again, and the process continues!
As much as we love Pac-Man, the goal of our work is not to better design video games. However, this
framework is generally applicable. Imagine a small town governed by a mayor. After the election, the
population of the town would not have guaranteed influence on the actions of the mayor, and instead have
to trust that the mayor had their best interests at heart. In this scenario, Social Environment Design
would guarantee that the population had a direct say in the usage of their tax dollars, and know that
their votes had direct influence in the governance of the town. Beyond eliminating the need for blind
trust, the Principal has the advantage of being able to consider much more information, and thus be more
contextualized, than any human.
When designing this framework, we wanted to try to satisfy several requirements.
- First, the framework should ensure the alignment of the Principal to the values of
the players in
the Inner Simulation, with fair and equitable representation.
- We want to be able to accurately represent the complicated government and economic
structures that
we see in the real world today.
- We need the framework to be efficient — it takes a lot of computer power
(expensive!) to run a
framework like this, and we want it to be able to scale to large scenarios. You can think of this like
fuel-efficiency — we want our miles-per-gallon to be very high.
- Lastly, we want this framework to help develop our theoretical understanding of
complex economics.
We argue that Social Environment Design does satisfy these requirements! Point 1: In
our framework,
illustrated in the figure above, we suggest addressing the concern of alignment by using an Principal
who seeks to achieve goals that directly stem from votes. The Principal can’t be corrupted by money or
re-election, unlike many human decision-makers. Points 2 and 3: Using some fancy math
called Game Theory,
we are able to create a complex environment, but still remain ‘fuel-efficient’ by hiding most of that
environment from each player (just like you! Most of the world is hidden from you right now; you can’t
see Antarctica from where you are). Point 4: By structuring our framework as repeated
loops of the same
process, we can reduce the larger economic problem into many smaller problems, which will enable us to
develop better theoretical understanding of complex economics.