Add discussion of comparative advantage as an example of harnessing diversity to "Collaborative Tech" and/or "Markets" chapter

[lauerj]

This is a really nice thought - I will think whether I have a strategy to develop a PR on this issue. Might link well with pooling and public goods (and thge principal-agency workaround)

[GlenWeyl]

Have you read my work with Veiga and Mahoney? Pooling is a very broad issue

---

Research Lead, Plural Technology Collaboratory (https://aka.ms/plural), Research Special Projects

---

Outside of Microsoft I am Founder of RadicalxChange (https://radicalxchange.org) and Founder and Chair of the Plurality Institute (https://plurality.institute)

---

From: Jeremy A Lauer @.> Sent: Wednesday, February 28, 2024 5:59:26 PM To: pluralitybook/plurality @.> Cc: Glen Weyl @.>; Author @.> Subject: Re: [pluralitybook/plurality] Add discussion of comparative advantage as an example of harnessing diversity to "Collaborative Tech" and/or "Markets" chapter (Issue #175)

This is a really nice thought - I will think whether I have a strategy to develop a PR on this issue. Might link well with pooling and public goods (and thge principal-agency workaround)

— Reply to this email directly, view it on GitHubhttps://github.com/pluralitybook/plurality/issues/175#issuecomment-1970060189, or unsubscribehttps://github.com/notifications/unsubscribe-auth/ABIRKSHOP7VCVPMRWGSY2OTYV6ZE5AVCNFSM6AAAAAA6UDZEC2VHI2DSMVQWIX3LMV43OSLTON2WKQ3PNVWWK3TUHMYTSNZQGA3DAMJYHE. You are receiving this because you authored the thread.Message ID: @.***>

[lauerj]

I'd seen the work on adverse selection and market power. Are you referring to multidimensional platform design? Or competition policy and product design? Or pricing institutions and adverse selection? All of the above? Platform design seems immediately relevant to the concerns I had in mind and is very plurality friendly. The original post issue of comparative advantage (CA) is interesting as a kind of perpetual motion machine for harnessing diversity in productive efficiency - not sure how much the pooling discussion reads across to the OP concerns, but binary models such as CA and principal-agency (PA) seem like proto-pooling models. There's possibly an analogy btw PA and CA, where PA is the informational version, and non-binary models (e.g. multidimensional markets) can yield additional welfare gains.

[lauerj]

BTW in the section on health insurance that I rewrote significantly after your previous comments on the pre-github markdown version, some of these issues come up: competition policy, adverse selection, network (i.e. 'platform') goods and plural goods etc. Sot it's almost like I had read those papers.

[GlenWeyl]

This is a longer conversation than I have the bandwidth to have in this forum during this crunch but if you think there is something you want to add before printing, I can try to make time to discuss live.

---

Research Lead, Plural Technology Collaboratory (https://aka.ms/plural), Research Special Projects

---

Outside of Microsoft I am Founder of RadicalxChange (https://radicalxchange.org) and Founder and Chair of the Plurality Institute (https://plurality.institute)

---

From: Jeremy A Lauer @.> Sent: Thursday, February 29, 2024 4:33:23 AM To: pluralitybook/plurality @.> Cc: Glen Weyl @.>; Author @.> Subject: Re: [pluralitybook/plurality] Add discussion of comparative advantage as an example of harnessing diversity to "Collaborative Tech" and/or "Markets" chapter (Issue #175)

BTW in the section on health insurance that I rewrote significantly after your previous comments on the pre-github markdown version, some of these issues come up: competition policy, adverse selection, network (i.e. 'platform') goods and plural goods etc. Sot it's almost like I had read those papers.

— Reply to this email directly, view it on GitHubhttps://github.com/pluralitybook/plurality/issues/175#issuecomment-1970746423, or unsubscribehttps://github.com/notifications/unsubscribe-auth/ABIRKSFXSC4HFAELUH7QKC3YV32WHAVCNFSM6AAAAAA6UDZEC2VHI2DSMVQWIX3LMV43OSLTON2WKQ3PNVWWK3TUHMYTSNZQG42DMNBSGM. You are receiving this because you authored the thread.Message ID: @.***>

[lauerj]

Let me draft something first, send it to you, and then we can discuss live. So we will have that live conversation iff there is a PR to resolve this issue, otherwise it can stay open.

[GlenWeyl]

Perfect!

---

Research Lead, Plural Technology Collaboratory (https://aka.ms/plural), Research Special Projects

---

Outside of Microsoft I am Founder of RadicalxChange (https://radicalxchange.org) and Founder and Chair of the Plurality Institute (https://plurality.institute)

---

From: Jeremy A Lauer @.> Sent: Thursday, February 29, 2024 7:57:32 AM To: pluralitybook/plurality @.> Cc: Glen Weyl @.>; Author @.> Subject: Re: [pluralitybook/plurality] Add discussion of comparative advantage as an example of harnessing diversity to "Collaborative Tech" and/or "Markets" chapter (Issue #175)

Let me draft something first, send it to you, and then we can discuss live. So we will have that live conversation iff there is a PR to resolve this issue, otherwise it can stay open.

— Reply to this email directly, view it on GitHubhttps://github.com/pluralitybook/plurality/issues/175#issuecomment-1971084853, or unsubscribehttps://github.com/notifications/unsubscribe-auth/ABIRKSBAW2UXSUV5FCMDNXLYV4STZAVCNFSM6AAAAAA6UDZEC2VHI2DSMVQWIX3LMV43OSLTON2WKQ3PNVWWK3TUHMYTSNZRGA4DIOBVGM. You are receiving this because you authored the thread.Message ID: @.***>

[lauerj]

hi Glen, Here's some text as promised. I would suggest putting it at line 64 of 05-00 (at the end of Collaboration Across Diversity and just before The Depth Breadth Spectrum), but that may require more thought. Please let me know if you'd like to discuss this further, or if you'd like me to make a PR in response to this issue (which would also close out the issue I raised about principal-agency). Best, Jeremy

As the low-entropy examples suggest, pooling across differences as a

source of benefit is a very general principle. Since pooling works by aggregation, it faces a problem not unlike that for the production of public goods, which is how to attract the right number of users/producers for the benefit to emerge. Indeed there are some canonical economic and social relations that might be called ‘proto-public goods' since they work through a reduced form of pooling entailing certain equally canonical disadvantages. For example, the principle of comparative advantage means that only when parties specialize in the production of the good they make best is aggregate welfare maximized under trade, which can result in over-exploitation and fragility at a macro-scale. At the micro-level, principal-agency arises from asymmetric information between parties driven by an almost mechanical logic to exploit their differences through trade: I may know better than anyone how I feel, but only my doctor may know for sure whether my heart is weak, and paternalism thus casts its long shadow. A pooling-of-difference logic also applies to multi-sided markets where there are distinct groups of customers who are more valuable to serve together or to selection markets where customers have varying costs of service. The specific strategy to maximize benefit differs, but the general principle is that, although size matters, bigger is not always better: what can matter more in fact is the strength of connections, where, for example, families, teams or troops – small networks completely connected by high-value interactions – can outperform in the production of key plural goods much larger ones with lower measures of centrality. Trade is ancient, and banding together to perform key social functions even more so if we consider the record of Paleolithic art. Pooling of difference at diverse scales, but by non-state actors, would thus seem to be an exception to the rule that 'public goods' are always under-supplied.

On Thu, 29 Feb 2024 at 13:08, Glen Weyl @.***> wrote:

Perfect!

---

Research Lead, Plural Technology Collaboratory (https://aka.ms/plural), Research Special Projects

---

Outside of Microsoft I am Founder of RadicalxChange ( https://radicalxchange.org) and Founder and Chair of the Plurality Institute (https://plurality.institute)

---

From: Jeremy A Lauer @.> Sent: Thursday, February 29, 2024 7:57:32 AM To: pluralitybook/plurality @.> Cc: Glen Weyl @.>; Author @.> Subject: Re: [pluralitybook/plurality] Add discussion of comparative advantage as an example of harnessing diversity to "Collaborative Tech" and/or "Markets" chapter (Issue #175)

Let me draft something first, send it to you, and then we can discuss live. So we will have that live conversation iff there is a PR to resolve this issue, otherwise it can stay open.

— Reply to this email directly, view it on GitHub< https://github.com/pluralitybook/plurality/issues/175#issuecomment-1971084853>, or unsubscribe< https://github.com/notifications/unsubscribe-auth/ABIRKSBAW2UXSUV5FCMDNXLYV4STZAVCNFSM6AAAAAA6UDZEC2VHI2DSMVQWIX3LMV43OSLTON2WKQ3PNVWWK3TUHMYTSNZRGA4DIOBVGM>.

You are receiving this because you authored the thread.Message ID: @.***>

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[GlenWeyl]

Jeremy, I don’t support getting into this at this level of abstraction. If this material belongs somewhere it’s in 05-07 on markets. This is just not fundamental enough to go in the information theoretic foundation of this all.

Glen

---

Research Lead, Plural Technology Collaboratory (https://aka.ms/plural), Research Special Projects

---

Outside of Microsoft I am Founder of RadicalxChange (https://radicalxchange.org) and Founder and Chair of the Plurality Institute (https://plurality.institute)

---

From: Jeremy A Lauer @.> Sent: Thursday, February 29, 2024 5:09:55 PM To: pluralitybook/plurality @.> Cc: Glen Weyl @.>; Author @.> Subject: Re: [pluralitybook/plurality] Add discussion of comparative advantage as an example of harnessing diversity to "Collaborative Tech" and/or "Markets" chapter (Issue #175)

hi Glen, Here's some text as promised. I would suggest putting it at line 64 of 05-00 (at the end of Collaboration Across Diversity and just before The Depth Breadth Spectrum), but that may require more thought. Please let me know if you'd like to discuss this further, or if you'd like me to make a PR in response to this issue (which would also close out the issue I raised about principal-agency). Best, Jeremy

As the low-entropy examples suggest, pooling across differences as a source of benefit is a very general principle. Since pooling works by aggregation, it faces a problem not unlike that for the production of public goods, which is how to attract the right number of users/producers for the benefit to emerge. Indeed there are some canonical economic and social relations that might be called ‘proto-public goods' since they work through a reduced form of pooling entailing certain equally canonical disadvantages. For example, the principle of comparative advantage means that only when parties specialize in the production of the good they make best is aggregate welfare maximized under trade, which can result in over-exploitation and fragility at a macro-scale. At the micro-level, principal-agency arises from asymmetric information between parties driven by an almost mechanical logic to exploit their differences through trade: I may know better than anyone how I feel, but only my doctor may know for sure whether my heart is weak, and paternalism thus casts its long shadow. A pooling-of-difference logic also applies to multi-sided markets where there are distinct groups of customers who are more valuable to serve together or to selection markets where customers have varying costs of service. The specific strategy to maximize benefit differs, but the general principle is that, although size matters, bigger is not always better: what can matter more in fact is the strength of connections, where, for example, families, teams or troops – small networks completely connected by high-value interactions – can outperform in the production of key plural goods much larger ones with lower measures of centrality. Trade is ancient, and banding together to perform key social functions even more so if we consider the record of Paleolithic art. Pooling of difference at diverse scales, but by non-state actors, would thus seem to be an exception to the rule that 'public goods' are always under-supplied.

On Thu, 29 Feb 2024 at 13:08, Glen Weyl @.***> wrote:

Perfect!

---

Research Lead, Plural Technology Collaboratory (https://aka.ms/plural), Research Special Projects

---

Outside of Microsoft I am Founder of RadicalxChange ( https://radicalxchange.org) and Founder and Chair of the Plurality Institute (https://plurality.institute)

---

From: Jeremy A Lauer @.> Sent: Thursday, February 29, 2024 7:57:32 AM To: pluralitybook/plurality @.> Cc: Glen Weyl @.>; Author @.> Subject: Re: [pluralitybook/plurality] Add discussion of comparative advantage as an example of harnessing diversity to "Collaborative Tech" and/or "Markets" chapter (Issue #175)

Let me draft something first, send it to you, and then we can discuss live. So we will have that live conversation iff there is a PR to resolve this issue, otherwise it can stay open.

— Reply to this email directly, view it on GitHub< https://github.com/pluralitybook/plurality/issues/175#issuecomment-1971084853>, or unsubscribe< https://github.com/notifications/unsubscribe-auth/ABIRKSBAW2UXSUV5FCMDNXLYV4STZAVCNFSM6AAAAAA6UDZEC2VHI2DSMVQWIX3LMV43OSLTON2WKQ3PNVWWK3TUHMYTSNZRGA4DIOBVGM>.

You are receiving this because you authored the thread.Message ID: @.***>

— Reply to this email directly, view it on GitHub https://github.com/pluralitybook/plurality/issues/175#issuecomment-1971104587, or unsubscribe https://github.com/notifications/unsubscribe-auth/AZZRFSCFLP5CDYLCEUQBLQTYV4T5TAVCNFSM6AAAAAA6UDZEC2VHI2DSMVQWIX3LMV43OSLTON2WKQ3PNVWWK3TUHMYTSNZRGEYDINJYG4 . You are receiving this because you commented.Message ID: @.***>

— Reply to this email directly, view it on GitHubhttps://github.com/pluralitybook/plurality/issues/175#issuecomment-1972054762, or unsubscribehttps://github.com/notifications/unsubscribe-auth/ABIRKSBAEAPQAZGR2GGQJE3YV6TLHAVCNFSM6AAAAAA6UDZEC2VHI2DSMVQWIX3LMV43OSLTON2WKQ3PNVWWK3TUHMYTSNZSGA2TINZWGI. You are receiving this because you authored the thread.Message ID: @.***>

[lauerj]

hi Glen, Personally, I wouldn't push this to anywhere in 05-07 as the flow there doesn't have hooks for it. We both think these issues are relevant, but where requires more thought. As I don't think there's anything fundamental that will be missed by rejecting, happy to shelve for now. Best, Jeremy

On Thu, 29 Feb 2024 at 22:33, Glen Weyl @.***> wrote:

Jeremy, I don’t support getting into this at this level of abstraction. If this material belongs somewhere it’s in 05-07 on markets. This is just not fundamental enough to go in the information theoretic foundation of this all.

Glen

---

Research Lead, Plural Technology Collaboratory (https://aka.ms/plural), Research Special Projects

---

Outside of Microsoft I am Founder of RadicalxChange ( https://radicalxchange.org) and Founder and Chair of the Plurality Institute (https://plurality.institute)

---

From: Jeremy A Lauer @.> Sent: Thursday, February 29, 2024 5:09:55 PM To: pluralitybook/plurality @.> Cc: Glen Weyl @.>; Author @.> Subject: Re: [pluralitybook/plurality] Add discussion of comparative advantage as an example of harnessing diversity to "Collaborative Tech" and/or "Markets" chapter (Issue #175)

hi Glen, Here's some text as promised. I would suggest putting it at line 64 of 05-00 (at the end of Collaboration Across Diversity and just before The Depth Breadth Spectrum), but that may require more thought. Please let me know if you'd like to discuss this further, or if you'd like me to make a PR in response to this issue (which would also close out the issue I raised about principal-agency). Best, Jeremy

As the low-entropy examples suggest, pooling across differences as a source of benefit is a very general principle. Since pooling works by aggregation, it faces a problem not unlike that for the production of public goods, which is how to attract the right number of users/producers for the benefit to emerge. Indeed there are some canonical economic and social relations that might be called ‘proto-public goods' since they work through a reduced form of pooling entailing certain equally canonical disadvantages. For example, the principle of comparative advantage means that only when parties specialize in the production of the good they make best is aggregate welfare maximized under trade, which can result in over-exploitation and fragility at a macro-scale. At the micro-level, principal-agency arises from asymmetric information between parties driven by an almost mechanical logic to exploit their differences through trade: I may know better than anyone how I feel, but only my doctor may know for sure whether my heart is weak, and paternalism thus casts its long shadow. A pooling-of-difference logic also applies to multi-sided markets where there are distinct groups of customers who are more valuable to serve together or to selection markets where customers have varying costs of service. The specific strategy to maximize benefit differs, but the general principle is that, although size matters, bigger is not always better: what can matter more in fact is the strength of connections, where, for example, families, teams or troops – small networks completely connected by high-value interactions – can outperform in the production of key plural goods much larger ones with lower measures of centrality. Trade is ancient, and banding together to perform key social functions even more so if we consider the record of Paleolithic art. Pooling of difference at diverse scales, but by non-state actors, would thus seem to be an exception to the rule that 'public goods' are always under-supplied.

On Thu, 29 Feb 2024 at 13:08, Glen Weyl @.***> wrote:

Perfect!

---

Research Lead, Plural Technology Collaboratory (https://aka.ms/plural), Research Special Projects

---

Outside of Microsoft I am Founder of RadicalxChange ( https://radicalxchange.org) and Founder and Chair of the Plurality Institute (https://plurality.institute)

---

From: Jeremy A Lauer @.> Sent: Thursday, February 29, 2024 7:57:32 AM To: pluralitybook/plurality @.> Cc: Glen Weyl @.>; Author @.> Subject: Re: [pluralitybook/plurality] Add discussion of comparative advantage as an example of harnessing diversity to "Collaborative Tech" and/or "Markets" chapter (Issue #175)

Let me draft something first, send it to you, and then we can discuss live. So we will have that live conversation iff there is a PR to resolve this issue, otherwise it can stay open.

— Reply to this email directly, view it on GitHub<

https://github.com/pluralitybook/plurality/issues/175#issuecomment-1971084853>,

or unsubscribe<

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[GlenWeyl]

You could put a footnote somewhere of pooling as an example of collaboration.

---

Research Lead, Plural Technology Collaboratoryhttps://aka.ms/plural, Research Special Projects

---

Collaboratehttps://github.com/pluralitybook/plurality with Digital Minister Audrey Tang, myself and dozens around the world to tell the story of Pluralityhttps://www.plurality.net/

---

From: Jeremy A Lauer @.> Sent: Thursday, February 29, 2024 6:00 PM To: pluralitybook/plurality @.> Cc: Glen Weyl @.>; Author @.> Subject: Re: [pluralitybook/plurality] Add discussion of comparative advantage as an example of harnessing diversity to "Collaborative Tech" and/or "Markets" chapter (Issue #175)

hi Glen, Personally, I wouldn't push this to anywhere in 05-07 as the flow there doesn't have hooks for it. We both think these issues are relevant, but where requires more thought. As I don't think there's anything fundamental that will be missed by rejecting, happy to shelve for now. Best, Jeremy

On Thu, 29 Feb 2024 at 22:33, Glen Weyl @.***> wrote:

Jeremy, I don’t support getting into this at this level of abstraction. If this material belongs somewhere it’s in 05-07 on markets. This is just not fundamental enough to go in the information theoretic foundation of this all.

Glen

---

Research Lead, Plural Technology Collaboratory (https://aka.ms/plural), Research Special Projects

---

Outside of Microsoft I am Founder of RadicalxChange ( https://radicalxchange.org) and Founder and Chair of the Plurality Institute (https://plurality.institute)

---

From: Jeremy A Lauer @.> Sent: Thursday, February 29, 2024 5:09:55 PM To: pluralitybook/plurality @.> Cc: Glen Weyl @.>; Author @.> Subject: Re: [pluralitybook/plurality] Add discussion of comparative advantage as an example of harnessing diversity to "Collaborative Tech" and/or "Markets" chapter (Issue #175)

hi Glen, Here's some text as promised. I would suggest putting it at line 64 of 05-00 (at the end of Collaboration Across Diversity and just before The Depth Breadth Spectrum), but that may require more thought. Please let me know if you'd like to discuss this further, or if you'd like me to make a PR in response to this issue (which would also close out the issue I raised about principal-agency). Best, Jeremy

As the low-entropy examples suggest, pooling across differences as a source of benefit is a very general principle. Since pooling works by aggregation, it faces a problem not unlike that for the production of public goods, which is how to attract the right number of users/producers for the benefit to emerge. Indeed there are some canonical economic and social relations that might be called ‘proto-public goods' since they work through a reduced form of pooling entailing certain equally canonical disadvantages. For example, the principle of comparative advantage means that only when parties specialize in the production of the good they make best is aggregate welfare maximized under trade, which can result in over-exploitation and fragility at a macro-scale. At the micro-level, principal-agency arises from asymmetric information between parties driven by an almost mechanical logic to exploit their differences through trade: I may know better than anyone how I feel, but only my doctor may know for sure whether my heart is weak, and paternalism thus casts its long shadow. A pooling-of-difference logic also applies to multi-sided markets where there are distinct groups of customers who are more valuable to serve together or to selection markets where customers have varying costs of service. The specific strategy to maximize benefit differs, but the general principle is that, although size matters, bigger is not always better: what can matter more in fact is the strength of connections, where, for example, families, teams or troops – small networks completely connected by high-value interactions – can outperform in the production of key plural goods much larger ones with lower measures of centrality. Trade is ancient, and banding together to perform key social functions even more so if we consider the record of Paleolithic art. Pooling of difference at diverse scales, but by non-state actors, would thus seem to be an exception to the rule that 'public goods' are always under-supplied.

On Thu, 29 Feb 2024 at 13:08, Glen Weyl @.***> wrote:

Perfect!

---

Research Lead, Plural Technology Collaboratory (https://aka.ms/plural), Research Special Projects

---

Outside of Microsoft I am Founder of RadicalxChange ( https://radicalxchange.org) and Founder and Chair of the Plurality Institute (https://plurality.institute)

---

From: Jeremy A Lauer @.> Sent: Thursday, February 29, 2024 7:57:32 AM To: pluralitybook/plurality @.> Cc: Glen Weyl @.>; Author @.> Subject: Re: [pluralitybook/plurality] Add discussion of comparative advantage as an example of harnessing diversity to "Collaborative Tech" and/or "Markets" chapter (Issue #175)

Let me draft something first, send it to you, and then we can discuss live. So we will have that live conversation iff there is a PR to resolve this issue, otherwise it can stay open.

— Reply to this email directly, view it on GitHub<

https://github.com/pluralitybook/plurality/issues/175#issuecomment-1971084853>,

or unsubscribe<

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[lauerj]

Good suggestion. I've added a footnote (text below) to the penultimate paragraph of 05-07 in my fork, and will include it in my next PR (the rest of which is copy-edits of 06-03 and the fixing of references in 06-03). Comments welcome.

Pooling across diversity is a very general principle. Although size matters, bigger is not always better, and the strength of connections can matter more. For example, families, teams or troops – small networks connected by high-value interactions – can outperform much larger ones in the production of ⿻ goods. If we consider the record of Paleolithic art, banding together to perform key social functions is extremely ancient, so collaborative pooling at diverse scales, albeit by non-state and non-market actors, seems an exception to the rule that 'public goods' are always under-supplied.

On Thu, 29 Feb 2024 at 23:02, Glen Weyl @.***> wrote:

You could put a footnote somewhere of pooling as an example of collaboration.

---

Research Lead, Plural Technology Collaboratoryhttps://aka.ms/plural, Research Special Projects

---

Collaboratehttps://github.com/pluralitybook/plurality with Digital Minister Audrey Tang, myself and dozens around the world to tell the story of Pluralityhttps://www.plurality.net/

---

From: Jeremy A Lauer @.> Sent: Thursday, February 29, 2024 6:00 PM To: pluralitybook/plurality @.> Cc: Glen Weyl @.>; Author @.> Subject: Re: [pluralitybook/plurality] Add discussion of comparative advantage as an example of harnessing diversity to "Collaborative Tech" and/or "Markets" chapter (Issue #175)

hi Glen, Personally, I wouldn't push this to anywhere in 05-07 as the flow there doesn't have hooks for it. We both think these issues are relevant, but where requires more thought. As I don't think there's anything fundamental that will be missed by rejecting, happy to shelve for now. Best, Jeremy

On Thu, 29 Feb 2024 at 22:33, Glen Weyl @.***> wrote:

Jeremy, I don’t support getting into this at this level of abstraction. If this material belongs somewhere it’s in 05-07 on markets. This is just not fundamental enough to go in the information theoretic foundation of this all.

Glen

---

Research Lead, Plural Technology Collaboratory (https://aka.ms/plural), Research Special Projects

---

Outside of Microsoft I am Founder of RadicalxChange ( https://radicalxchange.org) and Founder and Chair of the Plurality Institute (https://plurality.institute)

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From: Jeremy A Lauer @.> Sent: Thursday, February 29, 2024 5:09:55 PM To: pluralitybook/plurality @.> Cc: Glen Weyl @.>; Author @.> Subject: Re: [pluralitybook/plurality] Add discussion of comparative advantage as an example of harnessing diversity to "Collaborative Tech" and/or "Markets" chapter (Issue #175)

hi Glen, Here's some text as promised. I would suggest putting it at line 64 of 05-00 (at the end of Collaboration Across Diversity and just before The Depth Breadth Spectrum), but that may require more thought. Please let me know if you'd like to discuss this further, or if you'd like me to make a PR in response to this issue (which would also close out the issue I raised about principal-agency). Best, Jeremy

As the low-entropy examples suggest, pooling across differences as a source of benefit is a very general principle. Since pooling works by aggregation, it faces a problem not unlike that for the production of public goods, which is how to attract the right number of users/producers for the benefit to emerge. Indeed there are some canonical economic and social relations that might be called ‘proto-public goods' since they work through a reduced form of pooling entailing certain equally canonical disadvantages. For example, the principle of comparative advantage means that only when parties specialize in the production of the good they make best is aggregate welfare maximized under trade, which can result in over-exploitation and fragility at a macro-scale. At the micro-level, principal-agency arises from asymmetric information between parties driven by an almost mechanical logic to exploit their differences through trade: I may know better than anyone how I feel, but only my doctor may know for sure whether my heart is weak, and paternalism thus casts its long shadow. A pooling-of-difference logic also applies to multi-sided markets where there are distinct groups of customers who are more valuable to serve together or to selection markets where customers have varying costs of service. The specific strategy to maximize benefit differs, but the general principle is that, although size matters, bigger is not always better: what can matter more in fact is the strength of connections, where, for example, families, teams or troops – small networks completely connected by high-value interactions – can outperform in the production of key plural goods much larger ones with lower measures of centrality. Trade is ancient, and banding together to perform key social functions even more so if we consider the record of Paleolithic art. Pooling of difference at diverse scales, but by non-state actors, would thus seem to be an exception to the rule that 'public goods' are always under-supplied.

On Thu, 29 Feb 2024 at 13:08, Glen Weyl @.***> wrote:

Perfect!

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Research Lead, Plural Technology Collaboratory (https://aka.ms/plural),

Research Special Projects

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Outside of Microsoft I am Founder of RadicalxChange ( https://radicalxchange.org) and Founder and Chair of the Plurality Institute (https://plurality.institute)

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From: Jeremy A Lauer @.> Sent: Thursday, February 29, 2024 7:57:32 AM To: pluralitybook/plurality @.> Cc: Glen Weyl @.>; Author @.> Subject: Re: [pluralitybook/plurality] Add discussion of comparative advantage as an example of harnessing diversity to "Collaborative Tech" and/or "Markets" chapter (Issue #175)

Let me draft something first, send it to you, and then we can discuss live. So we will have that live conversation iff there is a PR to resolve this issue, otherwise it can stay open.

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[GlenWeyl]

@lauerj it would be great if you want to directly address the point of this issue. I am funding it now.

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[lauerj]

ok thanks will take a crack, welcome other inputs if any

On Sun, 10 Mar 2024 at 21:10, Glen Weyl @.***> wrote:

@lauerj https://github.com/lauerj it would be great if you want to directly address the point of this issue. I am funding it now.

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[GlenWeyl]

This is pretty simple...the idea is just to say "comparative advantage is precisely the idea of gains from diversity through the market mechanism, but of course this is just one manifestation of that idea and misses many other richer versions, as highlighted by later trade theory that is more sophisticated about supermodularity", but without assuming prior knowledge of the idea of comparative advantage.

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From: Jeremy A Lauer @.> Sent: Sunday, March 10, 2024 5:31 PM To: pluralitybook/plurality @.> Cc: Glen Weyl @.>; Author @.> Subject: Re: [pluralitybook/plurality] Add discussion of comparative advantage as an example of harnessing diversity to "Collaborative Tech" and/or "Markets" chapter (Issue #175)

ok thanks will take a crack, welcome other inputs if any

On Sun, 10 Mar 2024 at 21:10, Glen Weyl @.***> wrote:

@lauerj https://github.com/lauerj it would be great if you want to directly address the point of this issue. I am funding it now.

— Reply to this email directly, view it on GitHub https://github.com/pluralitybook/plurality/issues/175#issuecomment-1987363554, or unsubscribe https://github.com/notifications/unsubscribe-auth/AZZRFSGSOLANISUNTJCGBFTYXTK4TAVCNFSM6AAAAAA6UDZEC2VHI2DSMVQWIX3LMV43OSLTON2WKQ3PNVWWK3TUHMYTSOBXGM3DGNJVGQ . You are receiving this because you were mentioned.Message ID: @.***>

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[lauerj]

Yes, thank you, I see that and can definitely provide some text for review later today (GMT).

From: Glen Weyl @.> Sent: Sunday, March 10, 2024 9:36 PM To: pluralitybook/plurality @.> Cc: Jeremy A Lauer @.>; Mention @.> Subject: Re: [pluralitybook/plurality] Add discussion of comparative advantage as an example of harnessing diversity to "Collaborative Tech" and/or "Markets" chapter (Issue #175)

This is pretty simple...the idea is just to say "comparative advantage is precisely the idea of gains from diversity through the market mechanism, but of course this is just one manifestation of that idea and misses many other richer versions, as highlighted by later trade theory that is more sophisticated about supermodularity", but without assuming prior knowledge of the idea of comparative advantage.

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From: Jeremy A Lauer @.> Sent: Sunday, March 10, 2024 5:31 PM To: pluralitybook/plurality @.> Cc: Glen Weyl @.>; Author @.> Subject: Re: [pluralitybook/plurality] Add discussion of comparative advantage as an example of harnessing diversity to "Collaborative Tech" and/or "Markets" chapter (Issue #175)

ok thanks will take a crack, welcome other inputs if any

On Sun, 10 Mar 2024 at 21:10, Glen Weyl @.***> wrote:

@lauerj https://github.com/lauerj it would be great if you want to directly address the point of this issue. I am funding it now.

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[lauerj]

Thanks, @GlenWeyl. I've made a PR for this issue:

• it seemed easier to add the text on this issue to 05-00 where there is an explicit discussion of the benefits from diversity.
• there does not seem to be a non-zero bounty associated with this issue, i.e. the bounty is zero (which is fine btw).
• let me know if you prefer a different approach or want any changes that it would be too time-consuming for you to make directly.

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