My intuition is every good allocation system will use prices somewhere, whether the users see them or not. The main perk of the story’s economy is getting things you need without having to explicitly decide to buy them (ie the down-on-his-luck guy unexpectedly gifted his favorite coffee), and that could be implemented through individual AI agents rather than a central AI.
Fleshing out how this might play out, if I’m feeling sick, my AI agent notices and broadcasts a bid for hot soup. The agents of people nearby respond with offers. The lowest offer might come from someone already in a soup shop who lives next door to me since they’ll hardly have to go out of their way. Their agent would notify them to buy something extra and deliver it to me. Once the task is fulfilled, my agent would send the agreed-upon payment. As long as the agents are well-calibrated to our needs and costs, it’d feel like a great gift even if there are auctions and payments behind the scenes.
For pointers, general equilibrium theory studies how to allocate all the goods in an economy. Depending on how you squint at the model, it could be studying centralized or decentralized markets based on money or pure exchange.
A Toolbox for Economic Design is fairly accessible texbook on mechanism design that covers lots of allocation topics.
Another one of those interesting questions is whether the pricing system must be equivalent to currency exchange. To what extent are the traditional modes of transaction a legacy of the limitations behind physical coinage, and what degrees of freedom are offered by ubiquitous computation and connectivity? Etc. (I have a lot of questions.)
Results like the Second Welfare Theorem (every efficient allocation can be implemented via competitive equilibrium after some lump-sum transfers) suggests it must be equivalent in theory.
Eric Budish has done some interesting work changing the course allocation system at Wharton to use general equilibrium theory behind the scenes. In the previous system, courses were allocated via a fake money auction where students had to actually make bids. In the new system, students submit preferences and the allocation is computed as the equilibrium starting from “equal incomes”.
What benefits do you think a different system might provide, or what problems does monetary exchange have that you’re trying to avoid? Extra computation and connectivity should just open opportunities for new markets and dynamic pricing, rather than suggest we need something new.
My intuition is every good allocation system will use prices somewhere, whether the users see them or not. The main perk of the story’s economy is getting things you need without having to explicitly decide to buy them (ie the down-on-his-luck guy unexpectedly gifted his favorite coffee), and that could be implemented through individual AI agents rather than a central AI.
Fleshing out how this might play out, if I’m feeling sick, my AI agent notices and broadcasts a bid for hot soup. The agents of people nearby respond with offers. The lowest offer might come from someone already in a soup shop who lives next door to me since they’ll hardly have to go out of their way. Their agent would notify them to buy something extra and deliver it to me. Once the task is fulfilled, my agent would send the agreed-upon payment. As long as the agents are well-calibrated to our needs and costs, it’d feel like a great gift even if there are auctions and payments behind the scenes.
For pointers, general equilibrium theory studies how to allocate all the goods in an economy. Depending on how you squint at the model, it could be studying centralized or decentralized markets based on money or pure exchange. A Toolbox for Economic Design is fairly accessible texbook on mechanism design that covers lots of allocation topics.
This looks very useful. Thanks!
Another one of those interesting questions is whether the pricing system must be equivalent to currency exchange. To what extent are the traditional modes of transaction a legacy of the limitations behind physical coinage, and what degrees of freedom are offered by ubiquitous computation and connectivity? Etc. (I have a lot of questions.)
Results like the Second Welfare Theorem (every efficient allocation can be implemented via competitive equilibrium after some lump-sum transfers) suggests it must be equivalent in theory.
Eric Budish has done some interesting work changing the course allocation system at Wharton to use general equilibrium theory behind the scenes. In the previous system, courses were allocated via a fake money auction where students had to actually make bids. In the new system, students submit preferences and the allocation is computed as the equilibrium starting from “equal incomes”.
What benefits do you think a different system might provide, or what problems does monetary exchange have that you’re trying to avoid? Extra computation and connectivity should just open opportunities for new markets and dynamic pricing, rather than suggest we need something new.