Monday, April 28, 2014

Crowd Sponsored Results

There are 5 irrelevant search results for "Crowd Sponsored Results"

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The founder of Wikipedia, Jimmy Wales, was inspired by Hayek's essay..."The Use of Knowledge in Society".  The basic concept is that markets utilize information that is dispersed throughout society.  Wales used this critique of socialism (centralized allocation, top down control) to create a website that makes it easy for the crowd to share its partial knowledge.  Wikipedia works because it's based on a solid economic concept.  Not that there aren't a few glitches though.

The internet of the future will also be based on a solid economic concept.  The concept is that actions speak louder than words.  Talk is cheap so what people do should be given far more weight than what they say.  It's pretty much the opportunity cost concept.

Here are some of my recent blog entries on the topic...


Neither the internet nor the government reflects an understanding of this concept. This will eventually change.  My preference is for it to change sooner rather than later.  So here I am.

The primary objective of this entry is to try and facilitate this change.  If people can understand why it's necessary to clarify the demand for web pages...then they should also be able to understand why it's necessary to clarify the demand for public goods.

The secondary objective of this entry is to formally stake my claim to this intellectual property.


Current Search


When you conduct a search for "epiphyte"...the results are sorted according to their rank.  A result's rank is determined by incoming links.  The more links that point to a page...the higher its rank.

You have to do quite a bit of scrolling before you find my other blog... Epiphytes and Economics.  This is because it has relatively few links pointing to it.  Now it has one more link.

How much of a difference will this one link make?  That depends on the ranking of this blog entry.  If a website...such as the Wall Street Journal...links to this blog entry from their highly ranked home page...then it would boost the rank of this page...which would boost the rank of my epiphyte blog.

If I understand correctly, the current search system was inspired by scholarly paper citations.  For example...

A Pure Theory of Local Expenditures (Charles Tiebout):  12,000 citations
The Pure Theory of Public Expenditure (Paul Samuelson):  6,000 citations
The Economics of Earmarked Taxes (James Buchanan):  246 citations

(For analysis of these three important papers please see...Samuelson, Tiebout, Buchanan and Exit Granularity)

The more citations a paper has received...the higher its rank.  It's the same thing with search.  The more links a page has received...the higher its rank.

Looking again at the search results for "epiphyte"...we can see that the results are all the same type...organic.  But when you search for the more popular term "laptop" we can see two types of results...sponsored and organic.

The sponsors...Dell, Lenovo and HP...all had to bid high enough in order to have their results (advertisements) displayed at the top.  How much money did they have to spend?

Future Search


In the future, as you might have guessed from the title of this blog entry, search results will be crowd sponsored.  The crowd will easily be able to chip in to determine a page's rank.

Before we look at the blueprints...it will probably help if we sort out some terminology.  Let's call current search "search" and future search...

"value search": 272,000 results
"vearch": 11,000 results
"vurch": 40,600 results
"vuurch": 67 results

"Vuurch" isn't the greatest word...but it will work in the meantime.

Unlike with search, a vuurch database wouldn't be populated by robots.  Links would be submitted by users.  Perhaps in most cases they would be submitted by the creator of the page.  When submitting a link...a user  would be able to include as many tags/keywords as they desired.  But, each tag would most likely require a minimum contribution of perhaps a penny.

Using my epiphyte blog as an example, here's how it might look just before I submitted the link...

http://epiecon.blogspot.com/

epiphyte: $4.00
orchid: $3.00
tillandsia: $2.00
vertical garden: $2.00

When somebody vuurched for "epiphyte"...my page's rank would be $4.  If somebody vuurched for "epiphyte orchid" then my page's rank would be $7.

If a vuurcher thought that my page was undervalued for "epiphyte"...then they could chip in to boost my ranking.  If, on the other hand, they thought that my page was overvalued for "epiphyte"...then they could chip in to knock my ranking.  So the crowd would be able to value up or value down vuurch results.  They would also be able to add additional tags to pages...which would of course require the minimum contribution per tag.

My link's vuurch page would look something like this...

http://epiecon.blogspot.com/
submitted by Xero
most valued by Xero

+epiphyte: $10.00
+orchid: $7.00
+vertical garden: $2.00
+tillandsia: $2.00

Expanding the tags would reveal the valuators...

-epiphyte: $10.00
   Bob:$6.00
   Xero:$4.00
-orchid: $7.00
   Bob:$4.00
   Xero:$3.00
-vertical garden: $2.00
   Xero: $2.00
-tillandsia: $2.00
   Xero:$2.00

There would also be a tab where you could expand the users to reveal the tags.

When you viewed a user's vuurch page...you would be able to see their tags sorted by that user's valuations.  Expanding a tag would reveal the associated pages.  The user's vuurch page would provide the quickest and most accurate portrait of their values.  What would be on your page?

It stands to reason that, in order to valuate pages, people would have to be signed in.  It also stands to reason that people should be able to shift their chips.

For example...many people's promotional priorities are going to shift significantly before and after the 2016 presidential elections.  People should be able to shift their chips accordingly.

In a casino, if you make a bad bet...you'll lose your chips.  This wouldn't happen with vuurch.  After the elections...whether you bet on the winner or the loser...you'll be able to shift the same amount of money back to your previous priorities.

So with vuurch, you'll always have the chips that you buy. How you allocate them will communicate your values to the world.

In essence...the crowd would use vuurch to collaboratively create value signals...





Just like Wikipedia makes it easy for the crowd to share its knowledge...vuurch would make it easy for the crowd to share its values.   It's essential to try and appreciate that crowd valuations reflect far more knowledge than Wikipedia currently contains.  

Vuurch is a fundamental paradigm shift.

Vuurch vs Search


Life is short, don't waste your time on less valuable results.

With search, because signals are distorted...the results are wrongly ranked.  The logical consequence is that traffic is misdirected...it's sent in less valuable directions.   Search sends society on wild goose chases.  Search has society barking up the wrong trees.  Search turns society into Don Quixote.  Do you really want to be tilting at windmills?

With vuurch, the results would be ranked according to their true value to society.  Vuurchers wouldn't be looking through a glass darkly.  They would see pages sorted by the amount of money that people had bet on them...
Overall, I am for betting because I am against bullshit. Bullshit is polluting our discourse and drowning the facts. A bet costs the bullshitter more than the non-bullshitter so the willingness to bet signals honest belief. A bet is a tax on bullshit; and it is a just tax, tribute paid by the bullshitters to those with genuine knowledge. - Alex Tabarrok, A Bet is a Tax on Bullshit
Vuurch would cut through the bullshit.  But does this mean that vuurch would creatively destroy search?  I don't think so.  Here's a couple reasons why...

  1. Google indexes nearly every page in its entirety.  Not just web pages but pages from countless books.
  2. Organic results are a survey of opinions.  Surveys are interesting and useful.

These two things would probably ensure that search doesn't go the way of the buggy whip.

The division of labor between vuurch and search can be summarized like so.  If you want to know which laptop people value most...and/or you want to read the most valuable review of a laptop...and/or you want to change the ranking of a laptop...then you would vuurch.  If you want to find the user manual...then you would search.

Vuurch won't be the Google killer...it would be the Google tamer.  Not only would advertising revenue largely shift to vuurch but the size of the advertising pie would greatly increase.  This is because vuurch would make it extremely easy for anybody to promote a page with as little as a penny.

With vuurch, all the results would be sponsored and everybody would be a sponsor.  The barriers to entry would crumble away.

Vuurch vs Facebook


Facebook has likes.  Likes, links, citations and votes are all the same.  They flowcilitate shallow input.  They provide an extremely superficial reflection of people's interests.  Shallow input is the cover that you shouldn't judge the book by.  Contingent valuation is the technical term for surveys, polls and voting.

It's useful to know what people like...but it's far more insightful/essential to know what people value.

Facebook: Do you like something?  Yes
Vuurch: How much do you like something?  $________

Facebook: Do you like tax choice?  Yes
Vuurch: How much do you like tax choice?  $________

Facebook: Do you like the movie Chungking Express?  Yes
Vuurch: How much do you like Chungking Express?  $________

Facebook: Do you like the band Warpaint?  Yes
Vuurch: How much do you like Warpaint?  $________

Right now we have absolutely no idea who values Warpaint the most.  But that person exists.  And I'd really like to know who this person is.  What other bands do they also value?  Do they value any other bands more than they value Warpaint?

Vuurch would provide all this information by giving people the opportunity to demonstrate their preferences.  It would make it extremely easy for the crowd to put its money where its mouth is.

Vuurch vs Youtube


Youtube has thumbs up and thumbs down.  Same thing with "likes"...it's shallow input.

We can see that 47 people give 'Geppetto' by Optiganally Yours a thumbs up...and 1 person gives it a thumbs down.  We can also see that 12,003 people give 'Billie Holiday' by Warpaint a thumbs up...and 201 people give it a thumbs down.  These surveys are interesting...but like all surveys...they are superficial.  Vuurch would give people the opportunity to quantify their interest in these songs.  The crowd could chip in to improve their rankings.

Vuurch would flowcilitate deep input.

Vuurch vs Reddit


Reddit has votes up and down.  Again, it's shallow input.  There's no opportunity cost.  No opportunity cost means no sacrifice.  Sacrifice is the realm of values...in its absence there's only the unscratched surface.

For an extremely important example of the problem with shallow input please read... Flowcilitation.

Vuurch vs Flickr


In a bit of synchronicity...John Boggan, whose blog I follow, wrote this in a recent entry...
For example, Flickr allows us to see our photos ranked by popularity.  Now, how does Flickr decide what's "popular"?  Your guess is as good as mine.  Flickr opaquely explains, "This is a view of your 200 most popular bits, ordered by interestingness."  It's clearly not based (solely) on number of views; my two most-viewed photos are not even among the top 10 most interesting, so there's some other algorithm at work, presumably including things like number of comments, or how many people have tagged a photo as a favorite. - John Boggan, 400,000 views
Hidden algorithms are a huge hassle.  Vuurch's algorithm would be completely transparent and ridiculously simple.  If you want a page to rank higher for a certain keyword...then you would be able to see exactly how much you'd have to spend in order to outrank the competition. There's no algorithm guessing...just deciding whether it would be worth it to sacrifice the alternative uses of your money (opportunity cost).

Pragmatarianism vs Democracy


Clearly we can see from Google Search, Facebook, Youtube, Reddit and Flickr that there's no real understanding that deep input is far more valuable than shallow input.  This lack of understanding is also reflected in our public sector.  People can vote (shallow input) but they can't choose where their taxes go (deep input).

Just like with vuurch vs search...pragmatarianism (tax choice) wouldn't replace democracy.  People would still be able to vote...but pragmatarianism would give them the opportunity to quantify their concerns/interests/preferences.

Democracy: Do you like the war on drugs?  Yes/No
Pragmatarianism: How much do you like the war on drugs? $________

Here's a great passage on the topic of markets (pragmatarianism, vuurch) vs voting (democracy, search)...
But what are elections if not polls? In elections as in polls, no individual’s vote determines policy outcomes. Therefore, voters typically vote with far less prudence and shrewdness than they use when buying groceries or choosing a plumber, what people really want—in an economically meaningful sense—is revealed only through private market transactions where each person directly confronts the full costs of expressing his desires. In contrast, no poll or election reveals genuine wants constrained by costs. Only the market reveals genuine wants; therefore, only the market can be trusted to respond to people’s real demands. - Don Boudreaux, The Market: The Only Trustworthy Pollster

Neoreaction  


Have you heard of neoreaction aka dark enlightenment?  It's a relatively new movement that has a deep distrust of democracy.  One of the leaders of this movement, Mencius Moldbug, posted a blog entry on the future of search...
The Google Age ends when the Internet migrates to some new global reputation algorithm, and users switch to it for their searches. To trigger any such switch, the new algorithm must suck less, maybe by an order of magnitude. There is only one way of beating Google this badly: change the problem.
The flaw with Google's algorithm is that it's based on voting (shallow input).  Vuurch wouldn't have this flaw given that its algorithm would be based on spending (deep input).

Google search is a democracy where people have link votes...while vuurch would be a market where users have dollar votes.  Millions and millions of people "spent" links on Rebecca Black's song 'Friday'...but how many of those same people would be willing to spend their hard earned dollars to improve the song's rank?  Chances are extremely good that they would have more valuable pages to promote.

Do we want to know which pages people would actually be willing to promote with their own money?  Do we want to know which public goods people would actually be willing to promote with their own tax dollars?  Do we need accurate information in order to efficiently allocate resources?  Yes.  Yes.  Yes.

Larry Page


A couple things that Larry Page said about the future of search...
...the perfect search engine would understand whatever your need is. It would understand everything in the world deeply [and] give you back kind of exactly what you need.
...how to organize the world so that the world can solve important problems.
Putting the world's limited resources to their most valuable uses requires knowing what people truly value.  That's what vuurch would do for the internet and what pragmatarianism would do for the public sector.
Moreover, men's desires when left to achieve their own satisfactions, follow the order of decreasing intensity and importance: the essential ones being satisfied first. But when, instead of aggregates of desires spontaneously working for their ends, we get the judgments of governments, there is no guarantee that the order of relative importance will be followed, and there is abundant proof that it is not followed. - Herbert Spencer, An Autobiography 

Income Inequality


Larry Page would have far more vuurch influence than I would.  Would that be fair?  Yes, because he earned his influence. The fact of the matter is that his mega mega megaphone was willingly sponsored by the crowd.  The masses have magnified Page's influence. The multitude has multiplied Page's power. Why?  Because they value how he uses society's limited resources...which is exactly why they want him to have more influence.  The market is a 3V network.

This means that muting Page's megaphone wouldn't just block his deep input...it would block the deep input of the masses.  That's why socialism (our public sector) fails.  Socialism subverts the will of the people.  Markets, on the other hand, succeed because they flowcilitate deep input.  Therefore it's imperative that we create a market in 1. search (vuurch) and 2. the public sector (pragmatarianism).
Where no counsel is, the people fall: but in the multitude of counsellors there is safety. - Proverbs 11:14
Given enough eyeballs, all bugs are shallow - Linus's Law 
Of course, this knowledge wouldn't stop me from being extremely envious that Larry Page could value up Android infinitely higher than I could value up epiphytes.

Intellectual Property


Everything has a price.  My intellectual property is certainly no exception.

The price for my intellectual property would depend on the interested company.  For example, Google is an awesome company but it's verging on "OmniCorp".  So I'd be willing to accept less money from Yahoo.  How much less money?  Maybe a fifth?  If Google offered $5 billion...then I might be willing to accept $1 billion from Yahoo. Yahoo failed to buy Google when it had the chance...would it make the same mistake with the paradigm shifting vuurch?

Here's my ranking...

1. Yahoo
2. Amazon
3. Facebook
4. Microsoft
5. Google
100. Apple

God I hate Apple.

Claim Jumping


If somebody else claims this idea for their own...then there would have to be some solid evidence that they've already publicly demonstrated their preference for tax choice.  Having thoroughly studied the topic...I know exactly which people have publicly promoted tax choice.  It's a very small group of people.

The intersection between tech savvy individuals and economics experts is vanishingly small.  What are the chances that Dilbert has a decent grasp of economics?  Our society is as productive as it is because there's an advanced division of labor.  Usually when the same discovery is independently and simultaneously made...the people were working in the same narrow field.  Discovering "vuurch" requires seeing search from a good economist's perspective.

In other words...the title really wouldn't be...

"In Which Our Hero Paul Krugman Discovers A Better Search"

Because...when has Krugman ever criticized democracy?  Like every other bad economist he's too busy  humping Piketty's leg.  Bryan Caplan has criticized democracy...
How come no one voluntarily buys X?  Because people don't actually like X - at least not enough to pay for it.  Why does everyone praise X?  Because praising X sounds good.  Why do people unanimously vote for lavish spending on X?  Because voting is just a special kind of talking. - Bryan Caplan, The Public Goods Model vs. Social Desirability Bias: A Case of Observational Equivalence
...but he's definitely never promoted tax choice.

Easter Eggs


Markets result in the discovery of far more Easter Eggs because millions and millions of individuals are free to look in very different directions.  Have I found an Easter Egg?  I sure think so.  Vuurch would make it ridiculously easy for people to value up Easter Eggs.  Doing so would help bring valuable pages to the attention of more people.

In conclusion, here are a few relevant passages...
Enterprise is creative: people striving to produce better goods and services hit on new products, processes and technologies that improve the lives of everyone.  By stifling that enterprise and creativity, egalitarianism closes off the prospect of continual improvement in the material lives of the whole world. - Eamonn Butler, Foundations of a Free Society
When a great company, or even a great merchant, has twenty or thirty ships at sea, they may, as it were, insure one another. The premium saved upon them all, may more than compensate such losses as they are likely to meet with in the common course of chances. - Adam Smith, Wealth of Nations
By 1954, Buchanan had published five articles that prominently employed voluntary exchange theory; furthermore, he was the only active proponent of the theory. - Marianne Johnson, Public Economics, Market Failure, and Voluntary Exchange
In a world of uncertainty, no one knows the correct answer to the problems we confront and no one therefore can, in effect, maximize profits.  The society that permits the maximum generation of trials will be the most likely to solve problems through time (a familiar argument of Hayek, 1960).  Adaptive efficiency, therefore, provides the incentives to encourage the development of decentralized decision-making processes that will allow societies to maximize the efforts required to explore alternative ways of solving problems. - Douglass North, Institutions, Institutional Change and Economic Performance
This frugality and good conduct, however, is upon most occasions, it appears from experience, sufficient to compensate, not only the private prodigality and misconduct of individuals, but the public extravagance of government. The uniform, constant, and uninterrupted effort of every man to better his condition, the principle from which public and national, as well as private opulence is originally derived, is frequently powerful enough to maintain the natural progress of things towards improvement, in spite both of the extravagance of government and of the greatest errors of administration. Like the unknown principle of animal life, it frequently restores health and vigour to the constitution, in spite, not only of the disease, but of the absurd prescriptions of the doctor. - Adam Smith, Wealth of Nations

9 comments:

  1. No w how strong would the opportunity cost be? Could one, say, allocate the present value of their savings account to a church and then reclaim it during retirement all while having received interest, dividends, and capital gains along the way?

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    1. I'm honestly not sure whether you'd be able to cash out your chips. My first thought is that you shouldn't be able to. If you can't cash out your chips...perhaps this would decentivize people from trying to hack your account.

      Delete
  2. your scheme doesn't "clarify the demand for public goods", as I have explained to you previously, but clearly you have no interest in making truthful or honest statements.

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    1. Would vuurch clarify the demand for webpages?

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    2. No. Your "vuurch" idea is just a form of advertising.

      Google search shows some 'sponsored' pages at the top, whose position was paid for by the page owner, and other pages below which are ranked by google's algorithm. The 'sponsored' pages are just paid-for advertisements.

      If you aren't interested in the advertisements, you can ignore them. If you think google's algorithm doesn't return the sort of search results you want, you can use another search engine.

      Your claim is that the advertisements at the top of Google search results are the pages that people "value" the most, because their position in the results has been paid for. That is just a ridiculous and nonsensical argument.

      If there was a search engine which ranked pages exclusively according to how much people had paid to promote them, that would simply be a different sort of search engine with a different ranking system. There is absolutely no reason why such a search engine would more accurately represent people's "demand for websites".

      If you were interested in seeing how that fee-based search engine ranked results, you could use it, or if you were interested instead in how Google ranks results, you could use Google instead. One is not necessarily better than the other. What is ridiculous and completely false is your unfounded assertion that the fee-based search engine is necessarily superior to the non fee-based search engine.

      Delete
  3. A fundamental error in your way of thinking is your conflation of prices with "values".

    If, for example, a person is starving and they don't have enough money to buy a loaf of bread, does this mean they don't value the loaf of bread as much as a well-fed person who can afford to buy the loaf of bread? Of course not. The well-fed person simply has more money, so they can afford to buy the loaf of bread whereas the starving person can't.

    Given that you cite Samuelson a lot, it's strange that you ignore what he had to say on this subject:

    "Most economists e.g., Paul Samuelson[5] caution against attaching a normative meaning (value judgement) to the equilibrium price. For example, food markets may be in equilibrium at the same time that people are starving (because they cannot afford to pay the high equilibrium price). Indeed, this occurred during the Great Famine in Ireland in 1845–52, where food was exported though people were starving, due to the greater profits in selling to the English – the equilibrium price of the Irish-British market for potatoes was above the price that Irish farmers could afford, and thus (among other reasons) they starved.[6]"

    http://en.wikipedia.org/wiki/Economic_equilibrium#Normative_Evaluation

    You make the basic error that Samuelson warned against: you attach normative meaning to market prices.

    ReplyDelete
  4. Also, using Batman to illustrate your arguments makes no sense. Batman doesn't decide what to do based on what is most profitable, he does the exact opposite.

    He doesn't fight crime in order to make a profit, he does it because he thinks it's the right thing to do. He doesn't follow 'price signals', in fact he makes a financial loss from his crime-fighting activities.

    The Batman character inherits a fortune from his parents, and then chooses to use his wealth to fight crime. What if he chose instead to spend his whole time snorting coke and banging prostitutes, would this mean that there was no 'value' in fighting crime, and that snorting coke and banging prostitutes was a more "valuable" use of his time and resources? Of course not.

    ReplyDelete
    Replies
    1. The problem is that you are a classic fundamentalist. You have an extremely simplistic understanding of the world, and for you there is one simple answer to every problem. You believe in an completely unrealistic, totally idealized, perfect-competition-model version of the economy, which has nothing to do with how capitalist economies actually work. And you simply ignore everything which fails to conform to your absurdly simple view of the world.

      Instead of coming up with endless little catchphrases and 'memes' (which do nothing but repeat your one-track ideology in different forms), and selectively gathering up quotes which serve only to confirm your priors (whilst rigorously ignoring any quotes by the authors that don't), you should try to gain a better understanding of how economies actually function in reality.

      Your post on the Egyptian pyramids is completely irrelevant to the discussion here. I'm not calling for a totalitarian dictatorial command economy, so Ancient Egypt and Mao Zedong have nothing to do with the points that I have made.

      Also, you approvingly mention Deng Xiaoping, which is ridiculous given that he advocated a 'socialist market economy' (which in reality turned out to be a form of 'state capitalism').

      http://en.wikipedia.org/wiki/Socialist_market_economy


      Do I think that a dictatorship should centrally plan all food production? No.

      Do I think that markets are a good way to organize the production of goods and services? Yes.

      Am I a market fundamentalist who supports total 'laissez faire'? No.

      Do I think that government has an important role to play in the economy? Yes.

      Do I support democracy? Yes.

      Do I think your "tax choice" scheme is a good idea? No.

      Delete