Exploitation is when one rational economic agent violates the validity of another rational economic agent’s abstraction layer, using non-economic side-channels to make the latter accept an economically unfair division of gains from trade. Examples:
Violence.
Psychological manipulations. (Exerting psychological pressure that leads to bad, emotion-driven choices; gaslighting someone into thinking their work is less valuable than it is.)
“Frogboiling” is a subset of this to which many of your examples apply, where an agent inflicts costs on another agent that are dramatically smaller than terminating the economic relationship, but which add up. (Exploits e. g. hyperbolic discounting.)
Deception. (Lying about the meaning of the terms of the contract until the counterparty already commits to it; reneging on the contract; misrepresenting or concealing the actual state of the economy.)
Cultivating irrationality. (E. g., propagandizing CDT over FDT, so that other agents accept blackmail.)
Cultural influences. (Creating a culture in which e. g. working for Company A is seen as its own reward.)
Destroying the interfaces other economic agents can use to coordinate against you. (E. g., destroying communications, making agents (/employees) distrust each other, etc.)
Roughly speaking, exploitation can target one of the following:
Algorithms. (Make an economic agent behave not as an economic agent, but as some entirely different type of system; make a set of rational economic agents unable to act as a set of rational economic agents.)
Values. (Modify a self-interested agent into an agent that wants to pursue something other than its interests.)
Rationality. (Warp the target agent’s world-model into an incorrect but beneficial-to-you state, making it unable to make correctly-informed choices.)
After reading your and FlorianH’s comments, it seems to me that Econ 101 leaves it underspecified what it means to be an economical agent, and that those parts missing from the specification are the ones that matter here.
Naively, an economical agent is someone who accepts deals that increase the value they get. There seems to be nothing wrong with that; if we all become economical agents, our values will increase, which is a good thing.
But this is not the entire story. No agent accepts all hypothetical deals that would increase their value. Our attention and time are limited. We pick the seemingly best deals we are aware of. And there are probably other heuristics that successful agents follow, such as increasing their power, even if it does not increase the value in short term, because it will allow them to take more value in future.
People who insist on taking the Econ 101 perspective of “if the deal is not good for you, then simply don’t take it, duh” seem willfully blind to how the power is strategically gained and used.
This reminds me of Ayn Rand’s novels. Both the heroes and the villains could be called “economical agents” from certain perspective, but clearly they used different strategies. There is a difference between someone trying to get good deals without simultaneously crippling their trade partners, and someone for whom crippling their trade partners is an important component of how they get the good deals. Both of them are agents participating in the economy.
Exploitation is when one rational economic agent violates the validity of another rational economic agent’s abstraction layer, using non-economic side-channels to make the latter accept an economically unfair division of gains from trade. Examples:
Violence.
Psychological manipulations. (Exerting psychological pressure that leads to bad, emotion-driven choices; gaslighting someone into thinking their work is less valuable than it is.)
“Frogboiling” is a subset of this to which many of your examples apply, where an agent inflicts costs on another agent that are dramatically smaller than terminating the economic relationship, but which add up. (Exploits e. g. hyperbolic discounting.)
Deception. (Lying about the meaning of the terms of the contract until the counterparty already commits to it; reneging on the contract; misrepresenting or concealing the actual state of the economy.)
Cultivating irrationality. (E. g., propagandizing CDT over FDT, so that other agents accept blackmail.)
Cultural influences. (Creating a culture in which e. g. working for Company A is seen as its own reward.)
Destroying the interfaces other economic agents can use to coordinate against you. (E. g., destroying communications, making agents (/employees) distrust each other, etc.)
Roughly speaking, exploitation can target one of the following:
Algorithms. (Make an economic agent behave not as an economic agent, but as some entirely different type of system; make a set of rational economic agents unable to act as a set of rational economic agents.)
Values. (Modify a self-interested agent into an agent that wants to pursue something other than its interests.)
Rationality. (Warp the target agent’s world-model into an incorrect but beneficial-to-you state, making it unable to make correctly-informed choices.)
After reading your and FlorianH’s comments, it seems to me that Econ 101 leaves it underspecified what it means to be an economical agent, and that those parts missing from the specification are the ones that matter here.
Naively, an economical agent is someone who accepts deals that increase the value they get. There seems to be nothing wrong with that; if we all become economical agents, our values will increase, which is a good thing.
But this is not the entire story. No agent accepts all hypothetical deals that would increase their value. Our attention and time are limited. We pick the seemingly best deals we are aware of. And there are probably other heuristics that successful agents follow, such as increasing their power, even if it does not increase the value in short term, because it will allow them to take more value in future.
People who insist on taking the Econ 101 perspective of “if the deal is not good for you, then simply don’t take it, duh” seem willfully blind to how the power is strategically gained and used.
This reminds me of Ayn Rand’s novels. Both the heroes and the villains could be called “economical agents” from certain perspective, but clearly they used different strategies. There is a difference between someone trying to get good deals without simultaneously crippling their trade partners, and someone for whom crippling their trade partners is an important component of how they get the good deals. Both of them are agents participating in the economy.