15.5.1. Evolutionary systems and markets + markets, emergent order, Hayek, connectionism - many related ideas...spontaneous order, self interest, agents, etc. + a critique of "blind rationalism" - or hyperrationalism, the idea that a form model can always be found - order can develop even in anonymous systems, provding certain types of contacts are established, certain other things 15.5.2. shell games...who knows what? 15.5.3. key is that would-be "burners" must never know when they are actually being tested - with devastating effects if they burn the tester + example: how to guarantee (to some degree of certainty) that an anonymous bank is not renegging (or whatever)? - e.g., a Swiss bank that denies knowledge of an account - key is that bank never know when a withdrawal is just a test (and these tests may be done frequently) - the importance of repeat business 15.5.4. another key: repeat business....when the gains from burning someone are greater than the expected future business..... 15.5.5. reputations are what keep CA systems from degenerating into flamefests - digital pseudonyms mean a trail is left, kill files can be used, and people will take care about what they say - and the systems will not be truly anonymous: some people will see the same other people, allowing the development of histories and continued interactions (recall that in cases where no future interaction is exected, rudeness and flaming creeps in) + "Rumormonger" at Apple (and elsewhere) always degenerates into flames and crudities, says Johann Strandberg - but this is what reputations will partly offset 15.5.6. "brilliant pennies" scam 15.5.7. "reputation float" is how money can be pulled out of the future value of a reputation 15.5.8. Reputation-based systems and repeat business + reputations matter...this is the main basis of our economic system - repeat business....people stop doing business with those they don't trust, or who mistreat them, or those who just don't seem to be reputable - and even in centrally-controlled systems, reputations matter (can't force people to undertake some relations) - credit ratings (even for pseudonyms) matter - escrow agents, bonding, etc. - criminal systems still rely on reputations and even on honor - ironically, it is often in cases where there are restrictions on choice that the advantages of reputations are lost, as when the government bans discrimination, limits choice, or insists on determining who can do business with who + Repeat business is the most important aspect - granularity of transactions, cash flow, game-theoretic analysis of advantages of "defecting" - anytime a transaction has a value that is very large (compared to expected future profits from transactions, or on absolute basis), watch out - ideally, a series of smaller transactions are more conducive to fair trading...for example, if one gets a bad meal at a restaurant, one avoids that restaurant in the future, rather than suing (even though one can claim to have been "damaged") - issues of contract as well
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