Documenting six facts about the structure and dynamics of the LLM market, from Mert Demirer, Andrey Fradkin, Nadav Tadelis, and Sida Peng www.nber.org/papers/w34608
Congratulations to Frank Verboven (@frankverboven.bsky.social) for being appointed as AER coeditor, handling papers in empirical IO and related fields. His term starts on July 1. I’m delighted to have him on our team. @aeajournals.bsky.social #EconSky
🚨Free data alert!! 🚨 Please share.
Large new dataset of Amazon product reviews, including full text and photos and product characteristics, with individual *reviews labeled as fake reviews*.
I believe this is the first publicly available data of this kind.
github.com/bretthollenb...
Through the use of three case studies of model releases (Sonnet 3.7, Gemini 2.0 Flash, Gemini 2.5 Pro), I document three stylized facts:
1. New models are adopted quickly, with increased demand stabilizing within a few weeks.
Great point from @andreyfradkin.bsky.social: as a movement’s policies become more incoherent and harmful, the quality of “experts” who are willing to publicly defend it decreases precipitously.
It was fun engaging with the EconCS community!
3. There is substantial multi-homing, with users of the same app employing a mix of models.
This is still very preliminary work, so comments are welcome!
A new episode of Justified Posteriors just dropped. We discuss the recent papers of Chad Jones about existential risk and AI safety investment. Check it out!
open.substack.com/pub/empiricr...
2. New model releases differ in the degree to which they cause substitution from existing models or expand the market.
🚨 New working paper 🚨
Demand for LLMs: Descriptive Evidence on
Substitution, Market Expansion, and Multi-Homing
A key question for the business of AI is the extent to which LLMs are differentiated from each other. I use data from OpenRouter to take a first look.
andreyfradkin.com/assets/deman...
