Transcript Document

Altruistic Economics
A Relationship-Based
Trading Model
www.altruists.org
A presentation by Dr. Robin Upton.
BRAC University, 2005-03-07 18:00
Available for download at www.altruists.org/ae5
Attribution – NonCommercial - ShareAlike
Talk Structure
Talk Structure
1. Assumptions of the Market Economy
2. An Alternative Assumption
3. Model Modification
4. Model Developments
Failure
. Failure of Classical Assumptions
1. Assumptions of the Market Economy
Firstly…
i.
‘Perfect’ Information
ii.
Impartial Support Systems
Then we consider the nature of
iii. Relationships in the ‘Perfect’ Market
.
i. ‘Perfect’ Information
i. ‘Perfect’ Information
Once upon a time, a long, long time ago, shops were small.
In the market, everyone knew…
 Everything that
was on sale
 How much
it cost
 What the quality was like
Nowadays…
Nowadays
Nowadays …
Times have changed
ii. Impartial Support Systems
A healthy economy requires fair
access to other systems, such as:
Finance
Law
Equal Access To Credit?
Equal Access to Credit?
“More than ½ the population of the world…
do not qualify to take out a loan from a bank…
…My vision for the future?… to make credit a
human right.”
Muhammad Yunus
. Equal Charges for Credit?
Equal Charges for Credit?
2000
Money Movement due to Interest - 1980
Credit is …
Interest…
Expensive
for the
poor.
moves
money from
poor to rich.
Payment
German Household Groups According to Income
Income
Source: 1980 – A Changing Money System (M. Kennedy)
2000 – Bundesbank figures (H. Creutz)
Legal Example
.
Legal Example
Consider the typical software EULA…
TERMS AND CONDITIONS
•
•
•
We do what we want
We are not liable, whatever
Click to proceed…
Agree
Legal Summary
Legal Summary
Anyway… lawyers cost a lot of money !
So… money = legal power 
.
iii. The ‘Perfect’ Market
www.paecon.net
iii. The ‘Perfect’ Market
Modern Economics owes more to mathematics
than psychology. The market as modelled is…
 not about PEOPLE;
all about PRICES.
.
Relationships in the Market
Relationships in The Market
‘Perfect’ market relationships are …
 money-centred not people-centred
 self-interested not altruistic
 short-term not long-term
. Personal Relationships
Personal Relationships
‘Perfect’ personal relationships are …
 people-centred not money-centred
 altruistic not self-interested
 long-term not short-term
.
1. Market Economy - Summary
1. Market Economy - Summary
 Some assumptions are outdated
 Disharmony between Market &
Personal values
t.
2. An Alternative Assumption
2. An Alternative Assumption
Altruistic Economics
Classical Economics
Impartial
Support
Systems
Perfect
Information
THEORETICAL
ASSUMPTIONS
People Care
About One
Other
Selfish Individuals
Disharmony
between
Market & Personal
Relationships
.
PRACTICAL
EFFECT
Modelling Relationships
?
Modelling Relationships
1. Relationships exist between
particular individuals …
Relationship
.
Differentiating Relationships
Differentiating Relationships
2. Express different types of relationships…
…by adding a numerical element.
Sympathy, s
Sympathy, S
“Emotional Proximity” ~ s > 0 for Friendships
0
1
No
Love
At All
Love
Like
Self
Network of Care
www.altruists.org/355
Network Of Care
Aysha
Christopher
Cares for Birbal
Cares for Birbal
Birbal Cares for everyone else
Dipti Cares for no one
SBC
S0.4
AB
Aysha has a Sympathy
of 0.4 for Birbal, so
SCB
SBA
0.25
SAB=0.4
SBD
D
.
C
B
A
Trading
A to B
www.altruists.org/355
Trading
Aysha
Christopher
Cares for Birbal
Cares for Birbal
A to B
Birbal Cares for everyone else
Dipti Cares for no one
0.4SAB
SBC
SCB
0.25SBA
SBD
D
Consider a trade
between A & B …
.
C
B
A
Birbal Needs Help!
Birbal Wants Help!

Birbal has a computer problem,
so he publishes this fact:
User Type of Work Requested
B
Computer Repair
Rate
6
He estimates: 1 hour of competent help would
save him 6 hours of his own effort.
Aysha Can Help
Aysha Can Help!

0.4
B
A
0.25
Aysha is a computer engineer:
User Type of Work Offered
A
Computer Repair
Rate
-1
She estimates: 1 hour she spends = 1 hour of competent help
.
Selfish Transaction Evaluation
Individualistic Transaction Evaluation
Score using 2 self-evaluated time costs.
User
Work Offered
Rate
User
Work Requested
Rate
A
Computer Repair
-1
B
Computer Repair
6
Individualistic
Evaluation
A
B
-1
6
Individuals’ Scoring is Independent
.
NON-Zero Sum System 
www.altruists.org/392
NON-Zero Sum System
(-1,+6)
A+B=0

B
+
Good for B,

Good for Both
Bad for A
-
0,0
Bad for Both
+
A
Good for A,
Bad for B

-

 Independent scoring is NON-Zero Sum
Zero-Sum System
Zero Sum System
A+B=0

 Money is Zero-sum
=> (p,-p)
 No one here ever
makes* money…
+
B
(-p,p)
Good for B,
Bad for A
-

Good for
Both
+
Good for A,
Bad for B
Bad for Both

A
-

* ‘Making money’ is a euphemism; only forgers and central banks actually make it …
. Price = Systemic Conflict 
www.altruists.org/384
Price = Systemic Conflict 
A+B=0
(-1,+6)
+B
6
(-p,p)
Real Value (hidden)
Price P,
Splits the benefit A & B.
Benefit for A
= P-1
Benefit for B
= 6-P
A & B have
directly opposite
interests!
.
Good for B,
Bad for A
A
+
-
www.ledgerism.net/theInfoGap.htm
Real Cost
(hidden)
-1
-
Individualistic Transaction Evaluation
Individualistic Transaction Evaluation
Use of 2 self-evaluated time costs…
 Removes systemic competition!
Individualistic
Evaluation
A
B
-1
+6
 Use the Network of Care
to modify this evaluation.
.
Altruistic Transaction Evaluation
Altruistic Transaction Evaluation
Individualistic
Evaluation
A
B
-1
+6
Now apply the sympathy values…
.25
1
1
Altruistic
Evaluation
0.4
B
A
.4
A
-1
B
+6
+
+
0.4x+6 .25x-1
.
0.25
Altruistic
Evaluation
Indirect Sympathy
A
B
1.4
5.75
Indirect Sympathy
0.3
0.4
C
B
A
SBA
SCB
Sympathy is not only for one’s own friends …
A has indirect sympthy for C:
SAC = SAB x SAC = 0.4 x 0.3 = 0.12
.
2. Alternative Assumption - Summary
2. Alternative Assumption - Summary
Before trading:
A
SAB
B
Publish sympathy for friends.
User
A
Work Offered
Computer Repair
Rate
-1
User
B
Work Requested
Computer Repair
Rate
6
Publish offers/requests.
Evaluate trade:
Use sympathy values to revise
Individualistic
Evaluation
Record trade:
A
B
-1
+6
->
Altruistic
Evaluation
Publish post hoc feelings.
.
3. Model Refinement
A
B
1.4
5.75
3. Model Refinement
Limited Sympathy
• If you would spend 10 to save someone 50,
does that mean you would also spend 1,000 to
save them 5,000?
• Could you spend 1Crore to save them 5Crore?
• There are limits to what we do for others.
Sympathy limits reflect that.
.
Non-Linear Sympathy
Non-Linear Sympathy
• Sympathy is not constant
Gradient = 20
• People run out of sympathy &
get gradually less sympathetic
Gradient = 3
• Gradient increases with Time Given
.
Modelling Sympathy
Modelling Sympathy
Approximate the curve with straight lines:
Length 5h, gradient 2, so write it (5h 2)
Length 5h, gradient 10, so write it (5h 10)
Express the sympathy as
Multiplier = 1/s
Multiplier = 1/s
A is willing to spend up to 5 hours to save 10 hours for B
Hence, sympathy =5h/10h= 0.5
We will be looking at 1/s, which we
call the multiplier = 2 in this case
.
Sympathy Vectors
Sympathy Vectors
Multipliers
Lengths of Time
5h
2
5h 10
.
A & B Computer Example
A & B Computer Example
User
Work Offered
Rate
User
Work Requested
Rate
A
Computer Repair
-1
B
Computer Repair
6
Suppose A cares for B as follows:
B gains six hours for every hour of input from A, so
the transaction has a multiplier of 6.
A will put in 5 hours of work for B (because 6>2)…
However, she will not work any more for B,
since 6<10, so that a multiplier of 6 is insufficient.
.
Sympathy as Credit
Sympathy as Credit
2h 1
1h 2
2h 3
1h 4
1h 7
1h 10
1h 13
1h 15
• Increasing
multipliers ~
reluctance to
work
altruistically
as input is
used up
• Curves can be modelled as closely as is required
.
Calculation of Indirect Sympathy
Calculation Of Indirect Sympathy
A’s evaluation
B’s evaluation
Cheapest Rate (2):
12 B = 24 C
Cheapest Rate (3):
4 A = 12 B
.
Next Rate (4):
Cheapest Rate (3):
Next Rate (6):
6 A = 18 B
1 A = +6 B
.Conflation - SABC
+24B = 96 C
Conflation - S
A evaluates
B evaluates
4 A = 12 B 12 B = 24 C
6 A = 18 B 18 B = 72 C
1A= 6B
.
6 B = 24 C
.
Overall
4A=24C
6A=72C
1A=24C
ABC
SABC = 4h
Combination of Multiple Paths
6
6h 12
1h 24
Combination of Multiple Paths
If A also cares for D, who cares for C…
We know
SABC =
4h
6
6h 12
1h 24
Calculate
SADC =
15h 2
2h
5
3h 10
2½h 20
.
Intelligent Path Choice
Intelligent Path Choice
A has 2 sympathy paths to C, A B
C & A
B
Simply order the different
time values by multiplier:
The combination, SAC =
• SAC ‘contains the
intelligence’ of
alternate paths of
sympathy
15h
2h
4h
3h
6h
2½h
1h
2
5
6
10
12
20
24
D
3. Modified Model - Summary
D
C:
3. Modified Model - Summary
Sympathy expresses care for particular others.
Each relationship has a sympathy vector.
Conflation:
A B C
A C
Combination:
A
A C
C
So, sympathy can be calculated
between any 2 nodes on a
Network of Care…
.
4. Model Developments
4. Model Developments
Many Open Areas of Research …
• Recording Work Done
• Range Of Applications
• Multiple Currencies
• Delegated Voting
•Relationship Credit
.
Recording Work Done
Recording Work Done
• Scoring would encourage people to give more.
A
B
• Fairness is satisfied if, for any pair of nodes, resource
flow from A B is about equal to the flow from B A
.
Swinging of Relationship Credit
Swinging of
Relationship Credit
• Work Balance can be pushed out in either direction…
8h
20h
SBA=
40h 1
20h 2
20h 4
20h 10
8h 20
40h
20h
40h
B
A
20h
SAB=
40h 1
20h 2
20h 4
20h 10
8h 20
• Effect of variable multipliers is to restore the equilibrium
.
Range Of Applications
Range Of Applications
Altruistic Economics could apply at many levels.
Each node could represent, for example…
A person
•
A project
A family
•
An NGO
An idea
•
A country
Different levels could coexist, adding greatly
to the power & flexibility of the system.
.
Multiple Currencies
Multiple Currencies
Meetings Held /Day
Staff /PersonDays
Volunteer Assistance
/PersonDays
Patients Treated
Taka
• Users offer whatever currencies they like
• Users publish personal rates of conversion between different
currencies to allow efficient flow between them.
• Survival of the fittest will decide which are used
.
Voting As Currency
Voting as Currency
Suppose…
1. Everyone receives one unit of a new resource;
2. It can be kept or transferred to others at will;
3. Whoever has the most units of this resource at a
set time receives special treatment.
• This is a delegated voting system
.
Ranking By Relationship Credit
Relationship Credit
Offers
Computer/Hardware/Repair
Requests
!!
An Altruistic trading
system could rank
people by
contribution made.
This would reward
altruism by
meaning that the
most generous
people’s requests
were met more
quickly...
Robin Upton, +160h –45h, Rate= -0.2
Computer Hardware, Statistics, Foreign
Languages, Bangladesh Contacts …
Mike Channel, +120h –40h, Rate= 10h
Help! My scanner doesn’t seem to work. I
urgently need it to do a job on Nov. …
Kevin Towell, +14h –3h, Rate= -0.2
Computer Hardware, Motorbike repair,
Shop Management, Psychology …
Angela Robinson, +550h –175h,
Rating= 70h Can you help me with my
Laptop? The E-mail is giving me a lot…
James Beckett, +60h –15h, Rate= -0.35
Computer programming, Computer
Hardware, Electronics, Internet Advice …
Graham Upton, +3h –2h, Rate= 20h
I just can’t get my Wireless LAN working
properly. It keeps cutting out, just …
Need to Reward Generosity
not selfishness…
.
Gratuitous Self-Publicity!
WANTED !!!
Altruistically-Minded others to help program
An Internet communication layer necessary to implement
Altruistic Economics - www.altruists.org/ae