A workshop on the
Informal Value Exchange
the European Complex Systems Society
Conference, Lisbon, September 16th, 2010
workshop aimed to
promote inquiry into social phenomena that involve value-exchange, and
particular on systems for credit and value transfer that do not rely on
contract or centralised record keeping. Examples include: local
circles, informal lending of books among friends, generalised exchange
Hawala/Hundi systems of money transfer.
Informal value transfer and credit networks involve people or institutions providing credit or value transfer services based on social trust rather than laws and contracts. Such networks constitute a complex system that have been relatively unmodelled yet have a significant impact on people's lives (antrhropologists have studied them for a long time). ICT advances – for example the reduction of social distance and the advent of economically-feasible micro transactions – allow for significant improvements in reach and quality of these networks and might allow the release of presently untapped social resources.
We aim to contribute to understanding and to change in networks for credit and value transfer by individual based simulation. Many aspects of human cooperation involve some exchange of value and are the traditional subject matter of the field of economics. However this exchange often involves many social processes and mechanisms other than those usually considered by economists, including: social norms, altruism, reputation, trust, group membership, friendship, kinship, identity, status etc. These can only be understood by modelling them at the individual level (with possible analytic models later), using techniques such as agent-based simulation to take into account their social complexity.
The above artefacts are going to play an ever more important role thanks to the removal of barriers and to individual empowerment allowed by the growth of communication networks. As a consequence, the conversion of the above processes and mechanisms to their monetary value could grow more and more difficult, and the financial institutions that move and manage money could get reshaped. Two contrasting forces are at work here. On one hand, the ease with which value and credit can be transferred worldwide favours large, powerful organizations, whose aims grow less and less related to the territory. On the other hand, individuals can exert a stronger control on their own (small-scale) resources, creating a potential for peer finance, where mental constructs can play a very important role. We already see the effects of this second force in the rise of micro business and micro finance.
This workshop invites contributions of individual-based models of these aspects of society that involve value exchange or coordination. The economic processes of price, supply/demand and varieties of economic rationality (e.g. bounded rationality, optimisation etc.) are relatively well studied – this workshop aims to concentrate on the other social aspects involved.
All news pertaining to this topic and associated initiatives will be posted at http://scive.blogspot.com
The workshop took place during ECCS - the European Conference on Complex Systems at Lisbon, on the 16th September 2010. These are linked to the slides/presentation that were given.
Future plans, including publication of new/revised papers will be discussed at the end of the workshop. We have an "in principle" agreement from the editor of Real-World Economics Review to publish a selection of revised papers resulting from workshop in a special section there (depending on their quality and appropriateness), so that is a real possibility.