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0 pointsSolarNet7y ago0 comments

> The idea of the principle agent problem is that the best person who is able to understand their own wants and desires is the person themselves.

I don't see how markets are supposed to solve that when we allow countries with slaves to participate on the markets. Or landlords to exercise economic rent over the land that other people maintain and live on. I guess my point here is I'm not sure markets as we have them today solve that problem very well anyway.

> Equal number of people doesn't not solve the principle agent problem.

But it does. If your claim is that every person is an economic agent representing themselves on markets (which isn't true for many people, but sure let's go with it), then any equivalent system would have to factor in the amount of work they provide to the algorithms that are markets and provide an equivalent (alternatives might include surveys, bizarre computer generated questions, kickstarter style projects but with government/basic income style funds). That's fine, it's still an interesting direction of research, which would be necessary to understand the computational structure of economies.

The alternative claim, is that markets some how create a system that is greater than the sum of computers and people it encompasses... this paper deals with that by placing it squarely in the realm of NP completeness.

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stale20027y ago

Equal number of people doesn't solve the problem. It has to be the SAME people, working in exactly the same way to make decisions for themselves. IE, you just recreated a market.

An equivalent system would have to have the same people, in control of their own resources.

If you just replace the people who are currently making decisions about themselves, with DIFFERENT people, them the principle agent is no longer making decisions for themselves. A different person is making thise decisions for OTHER people, which is the principle agent problem.

Surveys and computer generated questions sounds an aweful lot like other people making decisions over other people's utility functions and resources. IE, they are not the principle agent.

You'd have to prove that surveys or whatever are better at deciding what a person wants than the person themself.

Even if you have more resources, it is still different resources. It is still different people making decisions for what other people want.

Bizarro7y ago

I don't see how markets are supposed to solve that when we allow countries with slaves to participate on the markets.

The idea that the small number of countries with however many number of slaves distorts the markets is ludicrous.

SolarNetOP7y ago

It's not that it distorts the market, but it's one reason why the assumption that markets some how solve the principle agent problem in the first place is wrong.

My personal argument is that I don't believe markets solve either the principle agent problem or the economic calculation problem, and so to require them of other systems is hypocritical. But even if markets somehow do, then Turing completeness would strongly imply that there are other economic systems that also have those properties. Otherwise magic (which this paper is evidence against).

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