Re: Schelling Points leads to interesting family investment opportunities
At 12:41 PM 7/28/96, Ian Grigg wrote:
Hi Tim,
you said:
The _costs_ of extending beyond the Schelling point boundaries is deemed to be too high, and the boundary persists.
This reminds me of the transactional theory of business units. Working from memory, the optimal size of a business unit is positively related to the cost of the transactions conducted between units, other things being held constant.
Thus, in a place where it is "expensive to do business" the dominant form of company will be large. Conversely in a cheap business environment, small companies will predominate. This notion spurs one to examine the transactional costs and to decide (or not) to lower them...
Yes, I think these things are deeply intertwined. Coase's work on the nature of corporations, for example. (Another connection is that economics and markets are largely about "signalling mechanisms," and it can be argued that prices are variants of Schelling points, albeit hopping around as other market players jockey for advantage.)
The interesting part for your family context is that falling transaction costs have purportedly produced a shift away from large companies to smaller units. Those falling costs are in the sphere of digital communications, other technology, and regulation. If such were to apply to the context of families, upbringing children and education in general, one might predict that the size of the family should shrink.
Which it has, as you note. The availability of microwave dinners, transportation to new jobs, new employment patterns, and other factors too numerable to mention are correlated fairly strongly with a reduction in the size of the average family.
One would then be lead to ask, if you are proposing that Internet technologies in general and crypto in particular are influences on the Schelling points related to the family rights set, can this result in smaller family units?
I wouldn't go quite _this_ far! (And it's hard to go too much further than we have already...as you noted, increasing numbers of Westerners are single.) Certainly your comments are generally relevant and interesting, and sociologists should have fun examining the economic, game-theoretic, psychological, and other factors that are interlinked. --Tim May Boycott "Big Brother Inside" software! We got computers, we're tapping phone lines, we know that that ain't allowed. ---------:---------:---------:---------:---------:---------:---------:---- Timothy C. May | Crypto Anarchy: encryption, digital money, tcmay@got.net 408-728-0152 | anonymous networks, digital pseudonyms, zero W.A.S.T.E.: Corralitos, CA | knowledge, reputations, information markets, Licensed Ontologist | black markets, collapse of governments. "National borders aren't even speed bumps on the information superhighway."
At 5:00 AM -0400 7/29/96, Timothy C. May wrote:
Which it has, as you note. The availability of microwave dinners, transportation to new jobs, new employment patterns, and other factors too numerable to mention are correlated fairly strongly with a reduction in the size of the average family.
On a wild tangent to the topic at hand, this reminds me of a talk at MIT I went to last year (?) given by an editor emeritus of SciAm, can't remember his name at the moment, but he was introduced by Phillip Morrison, which was memorable for its own sake. This guy talked about something he called the "demographic transition", where a country's per capita life expectancy went past, say, 50 or so. When that happens, people start to breed less. (Well, maybe the keep *breeding*, but not procreatively ;-)). As a result, family sizes and populations decline. He said that this has started to happen in India, and China's getting there, draconian population controls or not. I got the impression that he thought China couldn't have enforced their population controls without an increase in life expectancy, reality not being optional, and that law and government is an inevatably reactive and not proactive business. He said there are many hypotheses about what causes this decline in fertility, including the commonly held one that people make babies as a form old age pension income :-), but that all he was talking about was this very strong inverse correlation between population growth and life expectancy. He talked about this happening in Athens, and on the Italian peninsula during the Roman empire, and gave other historical examples, including, of course, Europe and America, Sweeden at the turn of the century being a good example. He said America was the exception which proves the rule, because most of our population growth now comes from immigration, and that one way to kill the vitality of America was to kill immagration, which should give erst-superpatriot Buchananite/Perotistas some pause for reflection. He even manges to describe the post-war baby-boom in these terms, but I forget how he did it. He also said that the obvious things like public health and education were good ways to increase life expectancy, but that the very best way to cause this "demographic transition" was a dramatic increase in personal income. :-). Given the recent Forbes "Billionaire" issue, calling the 21st century the "Asian Century", full of stories of the unleashed economic power of the former command economies of India, Indonesia, Malaysia, etc., not to mention China and VietNam or even Korea and Japan (yes, Virginia, they were and are quasi-command economies, especially in their domestic accounts) and, to a lesser extent, Singapore, I think he may be on to something here... The crypto-economic relavence here is that once we have the ability to have peer-to-peer transactions for everything transmittable (financial assets, expertise, even teleoperated skillsets), economic "commands" won't be audible for all the din of internet digital commerce. Watch what happens to life expectancy then... Cheers, Bob Hettinga ----------------- Robert Hettinga (rah@shipwright.com) e$, 44 Farquhar Street, Boston, MA 02131 USA "'Bart Bucks' are not legal tender." -- Punishment, 100 times on a chalkboard, for Bart Simpson The e$ Home Page: http://www.vmeng.com/rah/
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