Safety versus performance: How multi-objective learning reduces barriers to market entry

Emerging marketplaces for large language models and other large-scale machine learning models appear to exhibit market concentration, which has raised concerns about whether there are insurmountable barriers to entry in such markets. In this work, we study this issue from both an economic and an algorithmic point of view, focusing on a phenomenon that reduces barriers to entry. Specifically, an incumbent company risks reputational damage unless its model is sufficiently aligned with safety objectives, whereas a new company can more easily avoid reputational damage. To study this issue formally, we define a multi-objective high-dimensional regression framework that captures reputational damage, and we characterize the number of data points that a new company needs to enter the market. Our results demonstrate how multi-objective considerations can fundamentally reduce barriers to entry-the required number of data points can be significantly smaller than the incumbent company's dataset size. En route to proving these results, we develop scaling laws for high-dimensional linear regression in multi-objective environments, showing that the scaling rate becomes slower when the dataset size is large, which could be of independent interest.

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Publication Details

Journal
Proceedings of the National Academy of Sciences
Published
2025-10-15
DOI
https://doi.org/10.1073/pnas.2510004122
Primary Topic
Auction Theory and Applications
Type
article
Field-Weighted Citation Impact
0.00
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article

Safety versus performance: How multi-objective learning reduces barriers to market entry

Meena Jagadeesan, Michael I. Jordan, Jacob Steinhardt
Proceedings of the National Academy of Sciences
Auction Theory and Applications
article

Safety versus performance: How multi-objective learning reduces barriers to market entry

Meena Jagadeesan, Michael I. Jordan, Jacob Steinhardt
article en

Abstract

Emerging marketplaces for large language models and other large-scale machine learning models appear to exhibit market concentration, which has raised concerns about whether there are insurmountable barriers to entry in such markets. In this work, we study this issue from both an economic and an algorithmic point of view, focusing on a phenomenon that reduces barriers to entry. Specifically, an incumbent company risks reputational damage unless its model is sufficiently aligned with safety objectives, whereas a new company can more easily avoid reputational damage. To study this issue formally, we define a multi-objective high-dimensional regression framework that captures reputational damage, and we characterize the number of data points that a new company needs to enter the market. Our results demonstrate how multi-objective considerations can fundamentally reduce barriers to entry-the required number of data points can be significantly smaller than the incumbent company's dataset size. En route to proving these results, we develop scaling laws for high-dimensional linear regression in multi-objective environments, showing that the scaling rate becomes slower when the dataset size is large, which could be of independent interest.

Proceedings of the National Academy of SciencesVol. 122(42)
Institut national de recherche en sciences et technologies du numérique (FR), University of California System (US), University of California, Berkeley (US)
Openalex Percentile: Top 66%
Auction Theory and Applications
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