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Altruistic E conomics

www.altruists.org. Talk Structure. Altruistic E conomics. A Relationship-Based. Trading Model. A presentation by Dr. Robin Upton. BRAC University, 2005-03-07 18:00 Available for download at www.altruists.org/ae5 Attribution – NonCommercial - ShareAlike.

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Altruistic E conomics

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  1. www.altruists.org Talk Structure Altruistic Economics A Relationship-Based Trading Model A presentation by Dr. Robin Upton. BRAC University, 2005-03-07 18:00 Available for download at www.altruists.org/ae5 Attribution – NonCommercial - ShareAlike

  2. Failure . Failure of Classical Assumptions Talk Structure Assumptions of the Market Economy 2. An Alternative Assumption 3. Model Modification 4. Model Developments

  3. . i. ‘Perfect’ Information 1. Assumptions of the Market Economy Firstly… ‘Perfect’ Information ii. Impartial Support Systems Then we consider the nature of iii. Relationships in the ‘Perfect’ Market

  4. Everything that was on sale • How much it cost Nowadays… i. ‘Perfect’ Information Once upon a time, a long, long time ago, shops were small. In the market, everyone knew… • What the quality was like

  5. Nowadays Nowadays … Times have changed

  6. Law Finance Equal Access To Credit? ii. Impartial Support Systems A healthy economy requires fair access to other systems, such as:

  7. . Equal Charges for 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

  8. Money Movement due to Interest - 2000 Money Movement due to Interest - 1980 Income Payment Equal Charges for Credit? Interest… Credit is … moves money from poor to rich. Expensive for the poor. German Household Groups According to Income Source: 1980 – A Changing Money System (M. Kennedy) 2000 – Bundesbank figures (H. Creutz) . Legal Example

  9. Agree Legal Summary Legal Example • We do what we want • We are not liable, whatever • Click to proceed… Consider the typical software EULA… TERMS AND CONDITIONS

  10. . iii. The ‘Perfect’ Market Legal Summary Anyway… lawyers cost a lot of money ! money = legal power  So…

  11. all about PRICES. • not about PEOPLE; . Relationships in the Market www.paecon.net iii. The ‘Perfect’ Market Modern Economics owes more to mathematics than psychology. The market as modelled is…

  12. . Personal Relationships Relationships in The Market ‘Perfect’ market relationships are … • money-centred not people-centred • self-interested not altruistic • short-term notlong-term

  13. . 1. Market Economy - Summary Personal Relationships ‘Perfect’ personal relationships are …  people-centrednot money-centred  altruistic not self-interested  long-term notshort-term

  14. t. 2. An Alternative Assumption 1. Market Economy - Summary  Some assumptions are outdated  Disharmony between Market & Personal values

  15. . Modelling Relationships 2. An Alternative Assumption Altruistic Economics Classical Economics Impartial Support Systems People Care About One Other Perfect Information THEORETICAL ASSUMPTIONS Selfish Individuals Disharmony between Market & Personal Relationships ? PRACTICAL EFFECT

  16. Relationship . Differentiating Relationships Modelling Relationships 1. Relationships exist between particularindividuals …

  17. Sympathy, s Differentiating Relationships 2. Express different types of relationships… …by adding a numerical element.

  18. Network of Care Sympathy, S “Emotional Proximity” ~ s > 0 for Friendships 0 1 No Love At All Love Like Self

  19. A B C D SBC SAB Aysha has a Sympathy of 0.4 for Birbal, so SAB=0.4 SCB SBA SBD . Trading A to B www.altruists.org/355 Network Of Care AyshaCares for Birbal BirbalCares for everyone else ChristopherCares for Birbal DiptiCares for no one 0.4 0.25

  20. A B C D . Birbal Needs Help! www.altruists.org/355 Trading A to B Aysha Cares for Birbal Birbal Cares for everyone else Christopher Cares for Birbal Dipti Cares for no one 0.4 SBC SAB SCB SBA 0.25 SBD Consider a trade between A & B …

  21. 6 Aysha Can Help Birbal Wants Help!  Birbal has a computer problem, so he publishes this fact: He estimates:1 hour of competent help would save him 6 hours of his own effort.

  22. B A -1 .Selfish Transaction Evaluation Aysha Can Help!  0.4 Aysha is a computer engineer: 0.25 She estimates:1 hour she spends = 1 hour of competent help

  23. .NON-Zero Sum System  Individualistic Transaction Evaluation Score using 2 self-evaluated time costs. Individuals’ Scoring is Independent

  24. A+B=0 B   + Good for B, Bad for A Good for Both A - + Good for A, Bad for B Bad for Both   - Zero-Sum System www.altruists.org/392 NON-Zero Sum System (-1,+6) • Independent scoring is NON-Zero Sum 0,0

  25. B   + (-p,p) Good for B, Bad for A Good for Both A - + Good for A, Bad for B Bad for Both   - .Price = Systemic Conflict  Zero Sum System • Money is Zero-sum => (p,-p) A+B=0 • No one here ever makes* money… * ‘Making money’ is a euphemism; only forgers and central banks actually make it …

  26. 6 Price P, Splits the benefit A & B. Benefit for A = P - 1 Benefit for B = 6 - P A & B have directly opposite interests! -1 . Individualistic Transaction Evaluation www.altruists.org/384 Price = Systemic Conflict A+B=0 B (-1,+6) + Real Value (hidden) (-p,p) Good for B, Bad for A A + - Real Cost (hidden) www.ledgerism.net/theInfoGap.htm -

  27. .Altruistic Transaction Evaluation Individualistic Transaction Evaluation Use of 2 self-evaluated time costs…  Removes systemic competition!  Use the Network of Care to modify this evaluation.

  28. A B .25 1 1 .4 .Indirect Sympathy Altruistic Transaction Evaluation Now apply the sympathy values… 0.4 0.25 -1 +6 + 0.4x+6 + .25x-1

  29. 0.3 0.4 A B C SCB SBA .2. Alternative Assumption - Summary Indirect Sympathy 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

  30. SAB A B .3. Model Refinement 2. Alternative Assumption - Summary Before trading: Publish sympathy for friends. Publish offers/requests. Evaluate trade: Use sympathy values to revise -> Record trade: Publish post hoc feelings.

  31. Could you spend 1Crore to save them 5Crore? . Non-Linear Sympathy 3. Model RefinementLimited Sympathy • If you would spend 10 to save someone 50, does that mean you would also spend 1,000 to save them 5,000? • There are limits to what we do for others. Sympathy limits reflect that.

  32. Gradient = 20 Gradient = 3 . Modelling Sympathy Non-Linear Sympathy • Sympathy is not constant • People run out of sympathy & get gradually less sympathetic • Gradient increases with Time Given

  33. Multiplier = 1/s 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

  34. . Sympathy Vectors 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

  35. . A & B Computer Example Sympathy Vectors Multipliers Lengths of Time 5h 2 5h 10

  36. . Sympathy as Credit A & B Computer Example Suppose A cares for B as follows: Bgains 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.

  37. 2h 1 1h 2 2h 3 1h 4 1h 7 1h 10 1h 13 1h 15 . Calculation of Indirect Sympathy Sympathy as Credit • Increasing multipliers ~ reluctance to work altruistically as input is used up • Curves can be modelled as closely as is required

  38. .Conflation - SABC Calculation Of Indirect Sympathy B’s evaluation A’s evaluation Cheapest Rate (2): 12 B = 24 C . 4 A = 12 B Cheapest Rate (3): +24B = 96 C Next Rate (4): 6 A = 18 B Cheapest Rate (3): 1 A = +6 B Next Rate (6):

  39. 4h 6 6h 12 1h 24 . Combination of Multiple Paths Conflation- SABC SABC=

  40. 4h 6 6h 12 1h 24 We know SABC= 15h 2 2h 5 3h 10 2½h 20 Calculate SADC= . Intelligent Path Choice Combination of Multiple Paths If Aalso cares for D, who cares for C…

  41. B B B D D D D B D 3. Modified Model - Summary Intelligent Path Choice A has 2 sympathy paths to C, A B C & A D C: Simply order the different time values by multiplier: 15h 2 The combination, SAC = 2h 5 4h 6 • SAC‘contains the intelligence’ of alternate paths of sympathy 3h 10 6h 12 2½h 20 1h 24

  42. Conflation: A B C A C . 4. Model Developments 3. Modified Model - Summary Sympathy expresses care for particular others. Each relationship has a sympathy vector. Combination: A C A C So, sympathy can be calculated between any 2 nodes on a Network of Care…

  43. . Recording Work Done 4. Model Developments Many Open Areas of Research … Recording Work Done Range Of Applications Multiple Currencies Delegated Voting Relationship Credit

  44. A B . Swinging of Relationship Credit Recording Work Done • Scoring would encourage people to give more. • Fairness is satisfied if, for any pair of nodes, resource flow from A B is about equal to the flow from B A

  45. 40h1 20h2 20h4 20h10 8h20 40h1 20h2 20h4 20h10 8h20 40h 40h 20h 20h 20h 8h B A 20h 2 20h 2 SBA= SAB= 20h 4 20h 10 8h 20 . Range Of Applications Swinging ofRelationship Credit • Work Balance can be pushed out in either direction… 40h 1 40h 1 40h 1 • Effect of variable multipliers is to restore the equilibrium

  46. . Multiple Currencies Range Of Applications Altruistic Economics could apply at many levels. Each node could represent, for example… A person A family An idea • A project • An NGO • A country Different levels could coexist, adding greatly to the power & flexibility of the system.

  47. Meetings Held /Day Staff /PersonDays Volunteer Assistance /PersonDays Patients Treated Taka .Voting As Currency Multiple Currencies • 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

  48. .Ranking By Relationship Credit Voting as Currency • Suppose… • Everyone receives one unit of a new resource; • It can be kept or transferred to others at will; • Whoever has the most units of this resource at a set time receives special treatment. • This is a delegated voting system

  49. Computer/Hardware/Repair ! ! 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 … .Gratuitous Self-Publicity! Relationship Credit Offers Requests An Altruistic trading system could rank people by contribution made. This would rewardaltruismby meaning that the most generous people’s requests were met more quickly... Need to Reward Generosity not selfishness…

  50. WANTED !!! Altruistically-Minded others to help program An Internet communication layer necessary to implement Altruistic Economics - www.altruists.org/ae

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