Economics of Sharing

A large quantity of university students live in shared accommodations. They pay the rent independently and usually share the bills (which usually include electricity, gas, garbage collection or Internet access fees) with their flatmates. As a sharer of the bills, will you tend to consume more goods and services in the bill list or less (which, of course, do not reach the peak of the marginal utility curve) since you only need to pay a portion (probably not a large portion) of the cost.

It seems a rational decision to consume more because you own the whole utility gained from the consumption but only need to pay part of it. Suppose that you have 3 flatmates and the price of electricity is 1 euro per KWh. If you use the electrical appliance, which consumes 1 KWh of electricity, you get the benefit which is worth 1 euro, but you only need to pay 0.25 euro for it. Does it mean you earn 0.75 in this transaction? But we should consider the lost which may issue from the increased consumption by your flatmates due to the same consideration (do not forget you are the loser in their winning transactions based on the same theory). 

This is the economics of sharing. The key feature of the phenomena is that a portion of the cost of your consumption is paid the others, and you pay for a portion of the cost of their consumption. They cannot control the cost they pay for you and analogously, you cannot control the cost you pay for them. This is an interesting issue needs further thinking. Maybe we can get some inspirations from the game theory.

Random Thought during My Illness

I got a cold and had a sore throat and itchy eyes on Friday morning and started a fever that afternoon. Next day, I took a turn for the worse and the sore throat became more serious. I felt tired and run down. My body hurt all over. I also had severe head pains. My body temperature turned higher. I tried to read something, but I cannot concentrate. I did not take any medicine (actually; I refuse the medicine, especially the western medicine, due to its side effect). I will not take it unless have to. And I believed that I will recover soon, just like before. I am proved right again. I felt much better next morning. My body temperature became normal and the head pains disappeared. This is self-healing, a manifestation of the self-adaption of my body system.

Though I played Taichi in the early morning of Saturday, I had not played it regularly for 3 weeks. I was in poor condition. My body lost the balance of Yin and Yang as the Traditional Chinese Medicine says. In some conditions, the body system can return to the balance of Yin and Yang. Mostly, medicine is needed to create such conditions. 

People are weak and fragile when they are suffering. Even a strongest man will become the piteous girl. I thought of my wife, my mother and father, my brothers and sisters, and even all the other people who helped and may help me when I was at the worst. That may be the most reason why people need a family. That is the best and may be the only place you can heal yourself.

First Sense of Complexity Science

Complexity science is the subject for which one can explore all the life. It may rewrite the whole science, the economics and even change the way people think.

The world is recognized as a dynamic and non-equilibrium system with uncertainties, a contradictory unity. Any specific phenomenon is a connection of necessity and chance, regularity and randomness. There are at least four features of complex system. (1) Non-linearity. The explanation given by academician Guangzhao Zhou is quite clear, which states that a system is regarded as non-linearity if the action and the result of the action is disproportional. In the real world, no relationship is actually linear unless people define it for some reason. (2) Dynamics. Nothing is absolutely static. We can seize some features of a object due to its relative statics, which is just a section of dynamic process. Thus, it is unreliable to set the stability or equilibrium as the objective of research. Changing economy, if in the benign direction, is much better than the stable or optimized one. (3) Adaptivity of the agents. There are frequent interactions among the agents in the complex system. They can self-restrain and self-organize. They can adapt themselves to the change or shock from outside world to some sentence. And they can self-evolve as well. (4) Openness. The system keeps exchanging information (including energies and materials) with the outside system(s). It changes the environment and be changed by the outside environment. Actually, the information exchange offers what the system needs to evolve or even mutate.

Since the phenomenon is so complex and the stability and equilibrium are not qualified to be what we pursuit in the model any more, what should be the questions we try to answer in the research, or in other words, what should truth look like? Without deep thinking, I guess what the researchers should figure out is how the system work, or say, how the elements we cared about act in different dimensions. Is there a law demonstrates how they act (in the specific period and space) and what is the law? The different dimensions here refers to the different angles we observe the phenomenon. The phenomenon shows us different statements if we see it in different ways.

One of the biggest problems is, if a lot of elements are considered in our research, at least two difficulties will come up. First, the issue will be too complicated to solve by the current methods. Secondly, the conclusion we gain will be very indirect and becomes not so valuable due to the complication of the issue and too many hypothesises even if we solve it successfully. My further guess is we can simplify or abstract all the qualities of a system into two types. One is positive, the other is negative. One reflects the contradict side of the system, and the other one reflects the unified side of the system. Everything is syntheses of contradictions, which consist of contradict part and unified part. The quality comes from the contradict parts leads to the changing of the system, and the attraction to the outside elements, while the qualities shown by the unified parts makes the system stay the same and reject the outside world. Why not divided all the natures of an object into two sides which are contradict one and unified one (or positive and negative, or Yin and Yang, or any other names you like)? Tradition Chinese Medicine (TCM) defines all the qualities of the tissues in the body as Yin or Yang, and thus converts all the relationships relative to the body and its environment into the relationships between Yin and Yang. You see, it solves the problems of health well. And now some western doctors even said that only the TCM can cure the cancer. In Marx’s economics, all the elements in the economy are classified to either productive forces or relations of production. To some extent, we can say his theory provides a better explanation of economic than contemporary prevalent economic theory.

The next problem maybe how two model the 2D world. Well, this is exactly what we should figure out, we cannot go any further. Actually, some attempt has been done by Chinese scholars.