Peter Kollock Remembered - Markets, Currencies and Cooperation
Recently, Jerry Michalski hosted an Yi-Tan phone call to remember Peter Kollock, UCLA professor and lifetime student of cooperation and collective action. Michalski called it “one of my favorite Yi-Tan calls ever,” and my asynchronous listening enjoyment matched that of his hosting.
Kollock's student, Marc Smith, was the guest on the call. From a portion of the conversation (42+ minutes in), on social currencies:
Jerry Michalski: I’m often leery of social currencies and the need to do social accounting. I’m really ambivalent, because, on the one hand, it’s nifty that somebody credits you and makes it a little more explicit that you did something good, that you did them a favor or whatever else it is. But on the other hand, I think that making these things explicit is very dangerous for the social dynamic and really interferes a lot. One of the reasons I never participated in the Omidyar Network way back when was that it made really explicit, next to your name, in parentheses, was the number of credits that you had accrued in the system. That’s just one tiny example of hundreds that are out there. Any insights on whether, when, and how to make a little more explicit these social credits?
Marc Smith: A little bit. I think Peter would agree with the phrase, “Not everything that you can count, counts.” And: “Be careful what you count, because humans will optimize their behavior to anything you measure them on.”
I think the implication is: there are times when an accounting system matters, and typically those are times when prior exposures to actors in the marketplace are unlikely. And so, if I am going to find a mortgage broker or somebody to buy or sell stock with, the likelihood is that I don’t know them, and therefore I’m going to need some kind of formal accounting system. I need something that tells me how many times you have been indicted for fraud.
There is work from another sociologist named Gary Marx, who wrote a lot about privacy. … He noted that, if everything is known to your counter-party, there is not much currency left in the interaction. In other words, relationships form and are solidified by risk that is rewarded without going sour. If I give you the key to my house and a year later, you’ve never abused it, you’ve really demonstrated something. If I tell you a secret about my history and it doesn’t diffuse through my network, you’ve proven yourself to be trustworthy. If everything that there is to know about me is already public, there is nothing left to risk. And so, to your point, “when does it become pathological?” the answer is: (1) when it’s easily gamed, or (2) when it leaves me nothing left to risk.
Smith praised the talk that Kollock gave in Howard Rheingold's Literacy of Cooperation class (video here) and said that anyone who reads Kollock's article, "Social Dilemmas: The Anatomy of Cooperation" (pdf) deserves a Ph.D. on the spot! The Literacy video was my own introduction to Kollock's teaching, but instead of excerpting the Anatomy article, I'm going to point to two others.
From the working draft of 1999's "The Economies of Online Cooperation: Gifts and Public Goods in Cyberspace," which examined Linux and NetDay96 as examples of the online co-creation of public goods:
Although a number of different motivations for contributing to a public good were discussed, three structural features are common in many of the cases and can be regarded as the basic features required of any successful online community. These features are: (1) ongoing interaction, (2) identity persistence, and (3) knowledge of previous interactions. If members of a group will not meet each other in the future, if there is no stability in the names and identities that people adopt, and if there is no memory or community record of previous interaction, it will be very difficult to create and maintain a cooperative online community.
These three features rephrase those discussed by Robert Axelrod in The Evolution of Cooperation. Kollock added:
Among the other structure features discussed that can encourage cooperation are (4) making sure contributions are visible and that contributors are recognized for the efforts, and (5) well defined and defended group boundaries. To make a broad statement, to the extent an online community lacks each of these features, we can expect that cooperation and collective action will be less likely.
He also offered this caution:
[A]s remarkable as the products of online cooperation and collaboration have been, it may be that for the most part we have been picking the “lowest hanging fruit” – supplying interesting digital goods that can be provided by single individuals while ignoring duller, more complex, but no less useful public goods. I do not mean to slight the benefits that online interaction has brought, and further advances in hardware, software, and connectivity may reduce the cost of producing public goods still further and create new “low-hanging fruit.” Nevertheless, it is crucial to avoid an empty-headed extrapolation from current success to utopian visions of fully cooperative communities.
In 2006's "How Not to Build an Online Market: The Sociology of Market Microstructure" (pdf), Kollock and co-author E. Russell Braziel asked why so many of the online B2B markets had failed.
From the section, "lessons in the sociology of market microstructure":
The Importance of the Middle Ground: But aside from underestimating the inertia and resistance to change in various industries, efforts to create unmediated markets ignored the many key functions provided by middlemen and social networks that support the market. ... Having friends in the network to turn to for favors in order to solve problems is critical. Economies of goods rest on economies of favors.
Different Markets Require Fundamentally Different Structures: Our research and experience repeatedly showed that true fungible commodities were much less common than had been expected in the effort to create online exchanges. When examined at the behavioral level, many markets were “fragmented” not because of antiquated practices or inefficient communications, but because the markets were trading goods that were not (or rarely) substitutable.
The Technology Needs to Match the Sociology: The behavioral realities of markets and how people actually trade were ignored by many of the efforts to create online B2B exchanges. The goal in many cases was to create something approximating a mature financial market, and the technology was build with this in mind, assuming high volume, centralized, anonymous trade. The technology did not match how many markets operate, and even for true fungible commodities, did not acknowledge that the early days of a market may require a different structure than a mature market.
Here's to you, Peter!
