Subject: Re: Charging the Charger
From: "Stephen J. Turnbull" <stephen@xemacs.org>
Date: Tue, 17 May 2005 14:59:27 +0900

>>>>> "Joe" == Joe Corneli <jcorneli@math.utexas.edu> writes:

    Joe> But I can imagine designing simple simulations that might
    Joe> prove that if everyone thought _like Franklin_ about this
    Joe> stuff, things would be going better than if everyone thought
    Joe> _like Gates_.

Highly unlikely.  The Golden Rule is a great way to run a society of
clones, but the whole point of the market economy is "how do you deal
with the situation where 'as you would have them do unto you' is the
last thing _they_ want?"

Ie, the Golden Rule is great as a solution to "The Prisoners'
Dilemma", but leads to disaster in "The Battle of the Sexes."  It's
hard to imagine how you can get simpler than a couple of 2x2 matrix
games (unless they were zero-sum!), yet the results are diametrically
opposed.

So the question is "are hackers' software needs similar to those of
the rest of the world?"  I think the answer is pretty clearly "not all
that much," and for that reason I think that the Battle of the Sexes
is arguably the more appropriate simulation.  Doesn't prove that the
Invisible Hand Theorem applies to Microsoft, but does cast serious
doubt on the provability of the Franklin solution.

Technical Appendix
------------------

Payoffs are in the form A,B

Prisoners' Dilemma -- Golden Rule solution: A and B both want the
partner to do y, so they do y themselves, giving (y,y) -> (4,4).  Yay!!

\B       x         y
A\ _________________
x |     1,1      5,0
y |     0,5      4,4

Battle of the Sexes -- Golden Rule solution: A wants B to do x, so she
does x.  B wants A to do y, so she does y.  Giving (x,y) -> (0,0).
Hiss, boo!!  Note that the "sophisticated Golden Rule" (do unto others
as they would have you do unto them) also loses: (y,x) -> (0,0).  How
bloody depressing.

\B       x         y
A\ _________________
x |     2,1      0,0
y |     0,0      1,2

Market solution: Give A the right to sell her decision.  B buys A's
decision for 0.5, tells A "do y", does "y" herself.  (y,y) -> (1.5,1.5).
Party time!  Who'da thunkit?!  ;-)


-- 
School of Systems and Information Engineering http://turnbull.sk.tsukuba.ac.jp
University of Tsukuba                    Tennodai 1-1-1 Tsukuba 305-8573 JAPAN
               Ask not how you can "do" free software business;
              ask what your business can "do for" free software.