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Stars vs Spending

Xerographica          19 May 2015 04:50 AM


This forum should replace the star rating system with a monetary rating system. If you like a post... rather than giving it more stars... you'd spend more money on it.

I've shared this idea in other forums and so far the response has been... underwhelming. Unfortunately, most people who are nonplussed with the idea don't bother to explain their hesitation.

Here's what I recently posted in the Ron Paul Forums... Micropay, Vote Or Dance For Quality Content. You'd figure that if anybody is going to love the idea... it would be a bunch of capitalists. But if you look at the poll then you'd see that this is not the case. So far only one other member voted for micropayments.

People just don't see the connection between spending and abundance.

I like orchids. I spend money on orchids. Orchids are a lot more abundant than they used to be. Am I responsible for their abundance? Hah. The amount of money that I spend on orchids isn't even a drop in a bucket... or a drop in a pool... maybe it's a drop in a very large lake.

Do I benefit because I can spend money on orchids? Hardly. I benefit because other people can spend money on orchids.

Dahlen wrote this article... Bureaucracy in Public and Private Institutions. Beneath the article it says, "Would you like to read similar articles in the future?" Yes, I would like there to be an abundance of similar articles in the future... so I clicked "+2". Voila!?

If only that's how economics worked!!!!!!

"Would you like there to be an abundance of Laelia speciosa in the future? If so, just click "+2"". *click* Voila! Abundance!!! Laelia speciosas growing and blooming on every tree in the world!! Awesome!

But this really isn't how economics works. Economics requires sacrifice to work. It requires blood, sweat and tears.

If we want an abundance of articles from Dahlen... then we have to compete him away from the alternative uses of his valuable time and energy. And we can't effectively compete by giving him stars or votes or thumbs up or "likes". These worthless trinkets do not accurately communicate our valuation of his time and energy. As a result, we increase the chances of suffering from a scarcity of Dahlen's articles.

In order to effectively compete Dahlen away from the alternative uses of his valuable time and energy... we have to give him something valuable in return. We have to give him our blood, sweat and tears... aka money.

If I spent a penny on Dahlen's articles... would this be a drop in a large lake? No. Would it be a drop in a pool? No. Would it be a drop in a bucket? Maybe. Would it be a drop in a large cup? Maybe. Would it be a drop in a shot glass? Maybe.

Right now this is a pretty small group. Maybe I'd be the only one spending any money on Dahlen's articles. But for all I know one of you is really rich and you really love Dahlen's articles. This will benefit all of us who want an abundance of his articles in the future. But what are the chances that any of you really rich though? Pretty slim!

There's this guy named Sherwin Rosen who came up with Superstar Theory. Basically, larger markets make bigger superstars. Right now omnilibrium is a pretty small market.

Am I the only one interested in turning Dahlen into a small superstar? Probably. Small superstar? Heh.

Maybe this image will help? It's a guy working and thinking about golf, then he's playing golf thinking about sex and then he's having sex thinking about work.

The moral of the story is that we're always comparing the value of our present activity against the value of the alternatives. We're always weighing our options. For Dahlen, one of his options is to write articles on this forum. At any given time he derives x amount of value from this activity. If he's deriving y amount of value from playing golf... then as soon as x > y... he'll stop playing golf and start writing articles on this forum. The important part to understand is that, if we don't communicate our valuation of his articles... then x will be smaller than it should be. And if x is smaller than it should be... then he'll spend less time writing articles... which means that there will be a shortage of his articles.

Let's make up some numbers to work with...

Playing golf = y = $12

At least initially... Dahlen gets around $12 dollars worth of value from playing golf. So if he told you, "hey, I'm off to play golf" you could persuade him not to do so by giving him $12.01.

Writing articles = x = $10

At least initially... Dahlen gets around $10 dollars worth of value from writing articles.

And I say "initially" because all activity is subject to diminishing returns. For every beautiful woman, there's a guy that's bored with having sex with her.

We can imagine Dahlen playing golf and rather than thinking of boobs... he's thinking of the $10 dollars worth of value that he'd derive from writing articles.

y > x = continue playing golf
y < x = start writing article

Personally, I don't derive any value from Dahlen playing golf. So I'm not going to give him any money to play golf. What I do derive value from is reading his articles. So my mission is to help Dahlen make an informed decision. I have to communicate to him the amount of value that I derive from his articles. Let's say that I derive on average... 5 cents from each of his articles. I communicate this to him by giving him 5 cents for each of his articles.

As a result of this information that I've shared with him... while he's playing golf the number in his head is no longer $10... now it's $10.05. This is how much value he'll expect to get from writing an article. My 5 cents has made writing an article a marginally more attractive alternative. Perhaps he'll spend just a little less time playing golf and a little more time writing articles.

The more of you that give Dahlen 5 cents for his articles... the more attractive an alternative writing becomes for Dahlen. If we get x up to $13... then we're doing a better job of competing him away from golf. If we get x up to $20... then this is an even better number for him to think about while he's playing golf. We want to make golf as costly as possible. We want the opportunity cost of golf to be very high.

This is the general idea. What we know for sure is that Dahlen can't possibly make a truly informed decision in the absence of our valuation of his articles. He's not a mind-reader. He can't reach into our brains and pull out our valuation of his articles. And he can't act on information that he does not have. So without our valuations... it's a given that he'll allocate inadequate time to writing. His misallocation will be to the detriment of everybody who positively values his articles.

To zoom out a bit... if this forum facilitated micropayments... then Dahlen wouldn't be the only one who knows our valuation of his articles. Everybody would know our valuation of his articles. Everybody would know everybody's valuation of everybody's articles. In other words, we'd know the demand for articles. Well...not perfectly. But perfectly when compared to our current knowledge of the demand for articles. And knowing the demand for articles would ensure a better supply. This is how and why markets work. We use our money to inform each other... and, as a result, we all make better informed decisions.

What I'm saying isn't economically novel. You should know this if you've read Hayek's Nobel Prize winning essay... The Use of Knowledge in Society. What's novel is applying this essay/economics to forums. Just like it was novel for Jimmy Wales to apply it to encyclopedias.

From Hayek's essay...

"Which of these systems is likely to be more efficient depends mainly on the question under which of them we can expect that fuller use will be made of the existing knowledge."

Wikipedia is more efficient than regular encyclopedias because it makes fuller use of the existing knowledge. This forum can be more efficient than regular forums because it makes fuller use of the existing knowledge...

"We must look at the price system as such a mechanism for communicating information if we want to understand its real function—a function which, of course, it fulfils less perfectly as prices grow more rigid."

also...

"The price system is just one of those formations which man has learned to use (though he is still very far from having learned to make the best use of it) after he had stumbled upon it without understanding it."

This is why Wales hasn't created a forum that facilitates micropayments. It's a lot easier to grasp that information is dispersed than it is to grasp how payment is used to quickly communicate the most important information that we have.

Omnilibrium is like an island. How many of us are here? 30? 40? We can rely solely on words to communicate with each other... or we can also communicate with actions (spending). When has any group failed because of too much communication?

And besides, the available evidence supports the conclusion that stars or "likes" do not increase engagement...

A widespread assumption is that the more content is liked or shared, the more engaging it must be, the more willing people are to devote their attention to it. However, the data doesn’t back that up. We looked at 10,000 socially-shared articles and found that there is no relationship whatsoever between the amount a piece of content is shared and the amount of attention an average reader will give that content. - Tony Haile, What You Think You Know About the Web Is Wrong




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Dahlen 19 May 2015 11:00 AM
78%

Oh boy.

I confess myself flattered; it's the first time someone mentions my username 18 times in an article and expresses interest in paying for my ramblings. Yes, indeed, as an impoverished Eastern European, it would be in my rational self-interest to accept payment for articles (even short ones that were intended as mere conversation starters and include Youtube links to Weird Al Yankovic parodies), seeing as for me a sum as little as $20 translates to whoa money and to guess who's going shopping today!. To make things better, my writing articles for Omnilibrium wouldn't even represent an opportunity cost away from playing golf, since, as a poor Eastern European, golf is prohibitively expensive for me, my main form of exercising being 10-mile-long walks on drab boulevards lined with Communist blocs.

Alas, being an impoverished Eastern European, in the absence of free and simple upvotes I wouldn't be able to express my own interest in the sort of articles I would like to see posted more. I'd probably vanish pretty quickly from any community which required payments for basic features, dismissing it as "one of those rich people things" and resorting instead to quietly studying the fundamental books of political theory and macroeconomics and sociology (which I would pirate off the internet because books are bloody expensive and I lack a bank account), while saving my articles offline for my eyes only. Capitalizing on digital goods is not a bad idea. But it restricts participation to people who can and do complete online financial transactions, which by the way is not everybody.

Worry not, though; my time and energy are pretty much not valuable, and writing stuff for free online is a comparatively better use of these resources than other equally not lucrative alternatives that I have (lucrative alternatives are out of the question since I'm currently on a gap year out of college for clinical depression, which is another way of spelling "unemployable"). Meaningless internet points are enough of an incentive as far as I'm concerned, and a monetary incentive to write would probably bolster my confidence in making sweeping rhetorical statements I really have no job making. Motivated word vomit is not how writing works, especially in fields in which you know yourself not to be an expert, especially especially in fields out of your expertise which attract strong opinions with no knowledge to back them. The immense majority of everything I've written so far is offline for a damn good reason, which is, I'm like Socrates and Jon Snow in that I know nothing. The only statements that see the light of the day are those that a) are innocuous enough; b) ask for more input from more qualified people than me; and c) I'm at least 60% sure are not completely off the mark. Save for reasonably respectable academic bloggers, that's how online content should stay if we don't want otherwise okayish amateur writers to lower their quality and turn to pandering to their fanbase. (I'm not even sure it doesn't happen to respectable bloggers.)

So, in conclusion, thanks, but... the idea is heavily misdirected. I've noticed it's one of your pet ideas. That's nice. But it's more efficient to think of the best context for implementing it beforehand.


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Xerographica 20 May 2015 01:29 AM
52%

Alas, being an impoverished Eastern European, in the absence of free and simple upvotes I wouldn't be able to express my own interest in the sort of articles I would like to see posted more.

Eh....? In my article I said that I'd put some money in your digital wallet for the article you wrote. Having this money in your digital wallet would allow you to express your own interest in the sort of articles that you would like to see posted more.

Would I be the only person to put money in your digital wallet? Why wouldn't you want to find out? Ignorance is bliss?

The more money that people put in your wallet... the more influence/power/control you'd have over the future supply of articles.

Worry not, though; my time and energy are pretty much not valuable, and writing stuff for free online is a comparatively better use of these resources than other equally not lucrative alternatives that I have...

...now.

Should I wait until my gf has a more lucrative relationship option before I accurately communicate my valuation of our relationship?

Should an employer wait until his employee has a more lucrative job offer before accurately communicating his valuation of his employee?

These strategies are... risky!

If I value your articles then I should communicate this to you now. Not later. If everybody else does the same... then you can make a more informed decision down the road when you do have lucrative options.

Meaningless internet points are enough of an incentive as far as I'm concerned, and a monetary incentive to write would probably bolster my confidence in making sweeping rhetorical statements I really have no job making.

Icarus much? heh.

You're intelligent. Just write. I'm intelligent. If what you write resonates with me... then I'll give you some money. If it doesn't, then I won't.

If members of this forum sponsor intelligence... then more intelligent people will sign up. The logical result will be an abundance of intelligence.

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Fwiffo 26 May 2015 08:30 AM
62%

You're intelligent. Just write. I'm intelligent. If what you write resonates with me... then I'll give you some money. If it doesn't, then I won't.

If members of this forum sponsor intelligence... then more intelligent people will sign up. The logical result will be an abundance of intelligence.

There is an issue that a person is less willing to pay for a article that is well argued and intelligent but against their own position. That is there is a risk that you are not paying for intelligence per se. If you fund some types of articles and not others authors can figure out which types of articles get the moneys out of people. At points the argumenbt seems to be that this is a good thing and lessen low quality content but at others it seems you assume that authors would continue to produce exactly same than beofre compensation schemes. If authors know what the ... read more


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Fwiffo 20 May 2015 03:01 AM
56%


Eh....? In my article I said that I'd put some money in your digital wallet for the article you wrote. Having this money in your digital wallet would allow you to express your own interest in the sort of articles that you would like to see posted more.
You are still suggesting that this kind of mechanic to turn money into articles would be created. As things stand now there is no way to turn money into articles, such supply control doesn't happen (yet).

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ChristianKl 19 May 2015 05:45 AM
67%

As a result of this information that I've shared with him... while he's playing golf the number in his head is no longer $10... now it's $10.05. This is how much value he'll expect to get from writing an article. My 5 cents has made writing an article a marginally more attractive alternative.

Behavioral economics don't indicate that it works that way.

There are quite many documented cases where paying people destroys intrinsic motivation. There no reason to believe that the 10$ of pleasure value that he derives from writing the article stays constant.


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Xerographica 19 May 2015 02:02 PM
49%

A town volunteers to store nuclear waste. But they change their minds when offered compensation.

1. Risk your life for free? Ok
2. Risk your life for a little money? Not ok

What happened? Rationality.

Dahlen volunteers to write articles for free. But he changes his mind when offered compensation.

1. Exchange your time for nothing? Ok
2. Exchange your time for a little money? Not ok

What happened? Rationality.

If we start giving Dahlen money for his articles... and he continues to write them... then his initial decision was rational. He fully understood the sacrifice that he was making.

And I'm guessing you missed the part about stars...Motivation Crowding Theory.

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Fwiffo 19 May 2015 02:40 PM
59%

I am super confused. If I follow your logic it the follwoing should be consisternt with it

1. Exhange you time for nothing? Ok
2. Exchange your time for a little money? Ok

What happened? Irrationality


According to different parts of your post he should and should not continue writing the articles.

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polymathwannabe 19 May 2015 11:30 AM
67%

You say
stars or votes or thumbs up or "likes" [...] increase the chances of suffering from a scarcity of Dahlen's articles
But how?


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Xerographica 19 May 2015 01:18 PM
54%

The point of paying is to let a producer know that he's on the right track. The more you pay him... the greater the chances that he'll stay on the right track. The less you pay him... the greater the chances that he'll choose another track. Paying a producer with stars/likes is the same thing as paying him nothing.

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Fwiffo 19 May 2015 02:36 PM
59%

I understood that by implying that it increases scarcity. That it is worse than having no effect. That it somehow discourages him writing. In this comment you seem to hold that it preserves the scarcity. 0, negative or something else?

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is4junk 14 October 2015 05:38 PM
66%

Can an author already do this if they want with services like https://flattr.com/ ?

Wouldn't they just need to embed the button in the HTML or would omnilibrium need to do something to allow for it.

Personally, I wouldn't mind seeing someone embed a link to it on their posts. I don't think it should replace the star system.


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Fwiffo 20 May 2015 01:23 AM
59%

If you get compensated for your writing work then it stops being a bleeding. Doing uncompensated work should be equally effective as compensation with no work. And uncompmensated work means that work was done to this piece in particular. It could also argued that you have the flow of money backwards. Why are not the writers paying the viewers to have their stuff read? Both of their time is being used.

If you wrote forum articles for a living you might do it just to keep yourself fed not because you have actually something to say.


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Fwiffo 26 May 2015 08:37 AM
59%

It is nice to read a article written with care. I am wondering whether you are assuming that people don't understand your position when they instead might understand and reject it. If you have tried to sell this idea for long time you might have experience on why people don't get convincced of them. What are the reasons and do you think they commit some kind of fallacy or being somehow otherwise illegimate rejections?

I have seen that there are a lot of "market believers" that put very much faith and hope for market mechanics. However when the "invisble hand" is allowed to remain mysterious and its workings are not even attempted to be discovered it gets kinda worrying. In its extreme it results that you as a person are only worth what money you make, with all values that are invisble to money being ignored and even those visible only treated as far as econommics is concerned.


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