Amazon Gets an Edge With Its Secret Squad of PhD Economists (cnn.com)

An anonymous reader shares a report: With help from outside researchers, Amazon's economists are working on a way to measure inflation using thousands of transactions across its own platform. Automatically analyzing product descriptions allows them to better assess the quality of a dress or a juicer or a bathmat, theoretically creating a more accurate, up-to-date index of how much things cost. That's just one way Amazon is using the squad of economists it has recruited in recent years. The company has turned so many businesses, from retailing to cloud computing, inside out. Now Amazon is upending the traditional role of economists within companies, as well as the field of economics.

Amazon is now a large draw from the relatively small talent pool of PhD economists, which in the United States grows by about only 1,000 new graduates every year. Although the definition of "economist" is fuzzy, the discipline is generally understood as the study of how people use resources and respond to incentives. In the past few years, Amazon has hired more than 150 PhD economists, making it probably the largest employer in the field behind institutions like the Federal Reserve, which has hundreds of economists on staff. It was the only company with a recruiting booth at the American Economics Association's annual conference in January, handing out free pens and logoed stress balls.

Comments

What is the economist council's plan?

[Anonymous Coward]

Peon: Master Bezzy; might I inquire: What *is* the economist council's plan?

Bezos: It is eevil! *Man*, it is *so* eevil! ... It is a bad, bad plan, that will hurt ... *many*... *people* ... that are *good*. ... I think it's *great*, ... because it's so *bad*.

Peon: I see. ... I think. ...

Re: What is the economist council's plan?

[Anonymous Coward]

Amazon applying a PhD in economics to product bundling shows us starkly the banality of evil

Re: What is the economist council's plan?

[Anonymous Coward]

Same story across capitalism.

They weaponize sociologists for socially engineering consumer behavior and use economists to get ahead of the competition.

If that isn't enough, they stifle new startups with legal team injunctions to sap initial investments and delay their rollouts into their respective markets.

They say there's healthy competition in modern day capitalism but that's mostly malarkey at this point.

150 is a "large draw"?

[misnohmer]

They hired 150 people out of a pool which grows at 1000 per year, so assuming 40 year careers and sustained growth, should be at around 40,000 people. How is that a rage draw?

Re: 150 is a "large draw"?

[Anonymous Coward]

Hiring one economist is a lot and when the economist tells you that hiring him was a suboptimal move, you tend to not hire any more. So yes, 150 is a lot!

Re:150 is a "large draw"?

[Anonymous Coward]

You must be an economist.

Re:150 is a "large draw"?

[Anonymous Coward]

If they are "the largest employer in the field behind institutions like the Federal Reserve" then that is, relatively, a large draw. Most organizations will hire 1 or 2 economists at most. A lot of economists will end up working at universities where they publish research on economics and teach economics classes to undergraduates.

Re:150 is a "large draw"?

[ShanghaiBill]

so assuming 40 year careers and sustained growth, should be at around 40,000 people.

Average job tenure in America is about 5 years. It is likely higher for economists, since longer tenure is correlated with education, and they don't have much opportunity to job hop. So if we assume 10 years, then Amazon would have 1500 economists, or about 4% of the total.

Also, TFA assumes that the size of the talent pool will remain steady in the face of increasing demand. An economist should be able to tell them why that isn't true.

Later this year, at the press conference:

[Anonymous Coward]

Bezos: Many have said, I do things, that are not correct to do. I don't believe in such talk as this! -- I am nice humanoid with realistic feelings, ALL OF THE TIME!
First a joke: What do you call a cross between a a human, and a robot from planet Bezos? -- MY ASS! Njaaa, ha-haaa! -- ENOUGH!

Re:Later this year, at the press conference:

[Anonymous Coward]

1. Bezos: Let's get some graduates from the Poor Hungry Doctor program. They'll think we're credible then.
2. CNN: Amazon hires PhDs. Amazon is credible!
3. BizX Clickbait: ?????
4. Econ PhDs: Great, we're $200k in debt, and the best perk yet is ending up on Slashdot.
5. Universities: Profit!

not economists

[Anonymous Coward]

they are hiring people with phds on econometrics but whatever, you can call them however you like even if they only repeat the magic spells that try to cover the stench of the current economical system

Re: not economists

[Anonymous Coward]

Gee, and I thought they were going to figure out how many phoney bucks (aka dollars) the bansters printed while Obama was president. The money supply probably doubled in eight years. But hey, look at all the numbers go up, woohoo! Re-election time baby!

Rhetorical Question of the Day

[Anonymous Coward]

If Amazon hired 150 Ph.D. Chemical Engineers, I'd be impressed.
However, if you are looking for cheap labor, go for an Economist.
Union Plumbers and Electricians are way ahead of Economists.
Why would any smart person choose to study economics?

Re:Rhetorical Question of the Day

[ShanghaiBill]

Why would any smart person choose to study economics?

Because it is an interesting subject.

Despite what economists tell you, not everyone is motivated by money.

Re:Rhetorical Question of the Day

[Anonymous Coward]

Economists wouldn't tell you that; people who don't understand Economics pretending to be Economists would

Re:Rhetorical Question of the Day

[Anonymous Coward]

Because it is an interesting subject.

Despite what economists tell you, not everyone is motivated by money.

Get the **** out of slashdot please.

It's a Kung Pow reference!

[Anonymous Coward]

Jeez, did planet Bezos get /. mod points or what? It's a joke, referencing a speech from Master Betty.

And it's quite fitting, TBH.

PhD Economists

[Anonymous Coward]

I wonder how many of them love to hear themselves talk about their theories on how economies should work; theories that have no real grounding in reality or accounting for the human condition.

Re:PhD Economists

[ShanghaiBill]

theories that have no real grounding in reality or accounting for the human condition.

In the last two decades, there has been a strong shift in research toward "empirical economics" based on real-world data.

Warning: economic reports from corporate shills

[Anonymous Coward]

Or rather, more of them. Amazon thinks it will sway more buyers when it needs to by using planted economic pronouncements. Probably will; they use all manner of incentives and threats to push sales. And of course they will also stay busy writing up reports saying that "what's good for Amazon is good for the nation(/world)". Gotta keep that cash flowing.

socialscience

[Anonymous Coward]

The definition of "economics" is fuzzy. FTFY.

Re:socialscience

[Anonymous Coward]

But that sounds awfully close to socialism-science. I can't cite that on the campaign trail!

Re:Secret Squad of Nazi Guards

[NAZI NOSTALGIA!]

Respect zhe Schutzstaffel.

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Rhetorical Question of the Year.

[Anonymous Coward]

Just the study of... :-D

Re: Warning: economic reports from corporate shill

[Anonymous Coward]

^^THAT^^ is exactly what I'm talking about. You can't top Amazon hubris and self absorbed navel gazing

There is some reasoning behind this

[Anonymous Coward]

Many serious economists believe that Amazon is the only reason inflation hasn't impacted consumers as much.

Re: There is some reasoning behind this

[Anonymous Coward]

Nonsense. The CPI doesn't use typical Amazon goods. Even if Amazon created downward pressure on prices for goods outside the CPI that would leave more money for goods in the CPI. Serious is not the same as intelligent, insightful, or convincing.

Billion Prices Project

[Anonymous Coward]

"With help from outside researchers, Amazon's economists are working on a way to measure inflation using thousands of transactions across its own platform."

There is already a project like this that has been going on for a decade at MIT/Sloan and Harvard Business school called the Billion Prices Project.

You can read about it and see data here:
http://www.thebillionpricesproject.com/

Economy as a science

[manu0601]

From TFA

Amazon try to integrate [economists] as key advisers on nearly every business decision, using enormous amounts of data to replace intuition with science.

Indeed economy is a science, but governments' use around the globe has shown that it is easy to misuse it, especially by ignoring the conditions required for a result. I wonder if Amazon can do better.

Amazon inflation

[Anonymous Coward]

When the index includes food and housing and tobacco and alcohol. what everyone actually uses let me know.

Hope all economist rot in hell cause I will be there to stoke the fire.

And this makes Amazon more competitive how?

[MrL0G1C]

Seriously, this just seems like an unnecessary cost and I wouldn't trust Amazon to pick a representative basket of goods any more than I trust the gov't or other fiscal institutes.