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khansian t1_j4hef9m wrote

Reply to comment by DonManuel in The Gamification of Everything Is No Fun Adrian Hon’s book “You’ve Been Played” warns against the abuses of game logic in work and politics. by donnygel

How does this Yard Sale Model represent economic activity?

This Yard Sale Model involves people randomly pairing up and randomly exchanging wealth in a way that one person is always the loser and one person is always the winner. The model shows people flipping a coin and then trading a fraction of the others’ wealth.

How does that mimic trade? In voluntary trade, people are engaging in mutually beneficial trade exchange. I trade you my tchotchke for $5 because I value $5 more than my tchotchke; you do it because you value my tchotchke more than $5. Neither of us walks away “poorer.”

This is the kind of stupid stuff physicists come up with when they try to do economics.

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reverie42 t1_j4hu7jz wrote

They also assert that somehow being owed a debt counts towards your net worth, but having debt doesn't count against it, which is absolutely nonsensical. Meanwhile, they completely ignore how the net wealth of society actually changes (the creation and consumption/loss of things).

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Throwawayingaccount t1_j4oegwi wrote

> They also assert that somehow being owed a debt counts towards your net worth, but having debt doesn't count against it, which is absolutely nonsensical.

Have you looked at how money enters circulation?

Hint hint: it's because of shenanigans like what you just wrote.

(I'm explicitly not defending it. I think it's dumb, but it's what our financial system is based off of.)

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reverie42 t1_j4pc6nd wrote

Introducing more money to an economy is not the same as a loan.

In this case, you haven't created value in that case, you've simply fractionalized the value that currently exists. This is an important distinction.

Even with more loan-like things like treasury bonds, the instrument is a little more like a future (in reverse) than a loan.

None of these things create money on a balance sheet. There are huge benefits to owning assets and taking loans on them, but doing so does not mean you suddenly have no liabilities.

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frogandbanjo t1_j4j4ejb wrote

> In voluntary trade, people are engaging in mutually beneficial trade exchange. I trade you my tchotchke for $5 because I value $5 more than my tchotchke; you do it because you value my tchotchke more than $5. Neither of us walks away “poorer.”

So it's non-zero-sum because of a subjective tautology? That's a great theory. I can't imagine it ever producing unintended negative outcomes. <massive eyeroll>

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khansian t1_j4jb6u7 wrote

Not every aspect of economics has to be wrong in order for your preferred economic theory to be correct.

It’s hilarious how socialists/communists/idiots will disagree with anything and everything about economics, as if they “win” by default if economics is wrong. Yet they fail to realize their own theories would fall apart too if they deny even the most basic building blocks. Marx’s theories of exchange are also based on the principle that people trade on this basis of mutual benefit. His theories of exploitation don’t rely on workers being so stupid that they don’t realize they’re trading their labor for too little; his theories rely on the idea that they simply can’t get as much as they’re worth because of the capitalists’ power.

I’ve had self-described Marxists tell me that capitalists always collude and competition never drives down profit rates. The guy didn’t realize Marx’s whole theory of economic crisis is based on the idea that capitalists drive drown profits through competition.

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DonManuel t1_j4hfevw wrote

It's of course a model, an experiment and not a descriptive explanation. But it ends up with a similar accumulation of wealth like we observe in unregulated capitalism.

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khansian t1_j4hh7bb wrote

But I can come up with an infinite number of models that generate extreme inequality. Here’s one:

Flip a coin. Comes up heads, all wealth ends up with DontManuel. Comes up tails, nothing happens. Repeat until all wealth ends up with DontManuel.

The question is whether this model mimics reality in any way. Is there any reason to believe actual economic processes operate in this way or generate inequality in this way?

The problem isn’t even that it’s unrealistic. The problem is that the rules of this Yard Sale Model are so painfully contrived to generate extreme inequality that it doesn’t actually even yield any insight into anything. Of course if you make trade 1) random; 2) not mutually beneficial; and 3) trade is done as a fraction of wealth, then eventually some end up with everything.

Perhaps there’s some analogy here to entrepreneurship in select zero-sum contexts, where there can only be a few winners, past winners are more likely to win again, and most people lose. But then I have no idea why this is called the “Yard Sale” model.

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The_Last_Green_leaf t1_j4kuvbt wrote

>like we observe in unregulated capitalism.

where do we observe unregulated capitalism? the only country I can think of that has unregulated capitalism might be Somalia, because the government is near non existent,

there has never been unregulated capitalism, and America is far from unregulated, every industry has million of regulations, down to the most niche things.

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