Nobel Prize in Economics 2021 winners ‘laid foundation for cutting-edge tech’: Twitter

US-based social media giant Twitter recently said that publicly available work of the 2021 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel recipients– David Card, Josh Angrist and Guido Imbens helped them in solving several problems. In a recent thread, Twitter’s engineering division shared how the Nobel winners’ research and findings influenced their working practices.

“Understanding causal relationships is core to our work on identifying growth opportunities and measuring impact. This year’s winners laid the foundation for cutting-edge techniques we use to understand where Twitter can improve and how changes affect our platform experience,” Twitter Engineering said in its thread.

“We’re grateful for the role that academic research plays in driving innovation across society. We couldn’t do this work without the methodological foundation of the winners’ work and contributions across media,” they further noted.

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How did this research help Twitter?

The social media behemoth acknowledged that even though online experimentation is helpful to understand the impacts of product change, it is not the most efficient technique to measure long-term impact.

The engineering team at Twitter built a causal estimation framework on the statistical surrogacy idea. This is used when a company cannot wait for long-term outcomes and a model is created on the basis of intermediate data.

This framework is then combined with Twitter’s online experimentation platform for forming a feedback/validation loop and to infer product success accurately.

Another challenge faced by Twitter is to understand the impact of actions like liking and retweeting a tweet as “engagement actions often occur sequentially and at different surface areas. How to disentangle the effect of multiple actions present many challenges.”

To sort this out, the US-based company utilised Double Machine Learning framework for interpreting search experiments and making it a better place to serve public conversation. As per Twitter Engineering, these applications help in promoting “better understanding of tradeoffs among competing signals, helping our engineering team to iterate fast under more principled measurement and decision frameworks, making Twitter a better platform to create and share ideas and information.”

Also read: Twitter may soon make it easier for users to spot bot accounts by adding labels to them

Experiment that bagged the Nobel Prize in Economics 2021

While their Nobel citation acknowledged University of California’s David Card for empirical contributions to labour, Angrist and Imbens were awarded for methodological contributions in analysing causal relationships.

David Card used natural experiments to analyse labour market, effects of minimum wages, immigration and education. Results showed that raising minimum wages does not necessarily amount to fewer jobs. Data derived from a natural experiment is difficult to interpret as raising minimum wages will not impact everyone in the target group in the same way.

In the mid-1990s, Joshua Angrist and Guido Imbens demonstrated how precise cause-effect conclusions can be drawn from natural experiments.

“Card’s studies of core questions for society and Angrist and Imbens’ methodological contributions have shown that natural experiments are a rich source of knowledge. Their research has substantially improved our ability to answer key causal questions, which has been of great benefit to society,” says Economic Sciences Prize Committee chair Peter Fredriksson.

David Card and Guido Imbens’ Amazon connect

Two of these economists—David Card and Guido Imbens are affiliated with Jeff Bezos’ Amazon. Card and Imbens have also utilised econometrics to help Amazon solve its business challenges and serve customers.

“David and Guido have used applied econometrics to help us invent new ways to serve our customers,” said vice president and chief economist for Amazon’s Core AI group Pat Bajari. Bajari went onto congratulate them on their Nobel win and underscored, “They’re both truly outstanding economists, and they’ve been great mentors to, in particular, many of the younger economists at Amazon, helping them to rigorously frame business problems using economic reasoning and applied econometric methods. Congratulations to them both!”

Edited by Mehak Agarwal

Also read: David Card, Joshua Angrist, Guido Imbens win 2021 Nobel Prize in Economics