a thoughtful web.
Good ideas and conversation. No ads, no tracking.   Login or Take a Tour!
comment by veen
veen  ·  2062 days ago  ·  link  ·    ·  parent  ·  post: Ergodicity - Bringing altruism and collaboration into economic theory

    By pooling resources, those who do can be aided by others who don’t. Mathematically, it turns out that such pooling increases the grow rate of resources or wealth for all parties.

One only needs to look into history to find examples of this happening. It reminded me a lot of the creation of the Dutch water boards, which were originally created by groups of farmers in the 13th century realizing that if they built a large dike together instead of individual dikes, they could build stronger dikes for much less money per farmer. People band together if there's a clear long-term benefit - is that such a revolutionary insight?





goobster  ·  2062 days ago  ·  link  ·  

    People band together if there's a clear long-term benefit - is that such a revolutionary insight?

In economic theory, apparently it is. The difficulty is that economic theory has relied heavily on mathematical models, which - until recently - were not very good at calculation the very human parts of market interactions: emotions, altruism, collaboration, etc. Economists took a distinctly reductive approach to human behavior and said, basically, "If the person is going to gain monetarily from the interaction, then they will do it. Otherwise they will not."

It was a very black and white treatment of something that is only black/white in psychopaths. Normal humans react with more nuance, and by evaluating other factors including altruistic inclinations.