15.5.1. Evolutionary systems and markets
+ markets, emergent order, Hayek, connectionism
- many related ideas...spontaneous order, self interest,
agents, etc.
+ a critique of "blind rationalism"
- or hyperrationalism, the idea that a form model can
always be found
- order can develop even in anonymous systems, provding
certain types of contacts are established, certain other
things
15.5.2. shell games...who knows what?
15.5.3. key is that would-be "burners" must never know when they are
actually being tested
- with devastating effects if they burn the tester
+ example: how to guarantee (to some degree of certainty)
that an anonymous bank is not renegging (or whatever)?
- e.g., a Swiss bank that denies knowledge of an account
- key is that bank never know when a withdrawal is just a
test (and these tests may be done frequently)
- the importance of repeat business
15.5.4. another key: repeat business....when the gains from burning
someone are greater than the expected future business.....
15.5.5. reputations are what keep CA systems from degenerating into
flamefests
- digital pseudonyms mean a trail is left, kill files can be
used, and people will take care about what they say
- and the systems will not be truly anonymous: some people
will see the same other people, allowing the development of
histories and continued interactions (recall that in cases
where no future interaction is exected, rudeness and
flaming creeps in)
+ "Rumormonger" at Apple (and elsewhere) always degenerates
into flames and crudities, says Johann Strandberg
- but this is what reputations will partly offset
15.5.6. "brilliant pennies" scam
15.5.7. "reputation float" is how money can be pulled out of the
future value of a reputation
15.5.8. Reputation-based systems and repeat business
+ reputations matter...this is the main basis of our economic
system
- repeat business....people stop doing business with those
they don't trust, or who mistreat them, or those who just
don't seem to be reputable
- and even in centrally-controlled systems, reputations
matter (can't force people to undertake some relations)
- credit ratings (even for pseudonyms) matter
- escrow agents, bonding, etc.
- criminal systems still rely on reputations and even on
honor
- ironically, it is often in cases where there are
restrictions on choice that the advantages of reputations
are lost, as when the government bans discrimination,
limits choice, or insists on determining who can do
business with who
+ Repeat business is the most important aspect
- granularity of transactions, cash flow, game-theoretic
analysis of advantages of "defecting"
- anytime a transaction has a value that is very large
(compared to expected future profits from transactions,
or on absolute basis), watch out
- ideally, a series of smaller transactions are more
conducive to fair trading...for example, if one gets a
bad meal at a restaurant, one avoids that restaurant in
the future, rather than suing (even though one can claim
to have been "damaged")
- issues of contract as well
By Tim May, see README
HTML by Jonathan Rochkind