16 Points about Prices – the fundamentals of my undergrad thesis

from a note in my journal called “roughly what I want to talk about with thesis” 07SEP14 

I had read so much that summer and was dealing with a stressful field of ambiguity with what point I was going to try to make for my eventual thesis. This is from about 2 months before I actually put pen to paper and wrote the full thing. Serious writers block.

1. Price is an information system that helps to solve allocative and coordination problems in an economy
   1. Assumptions
      1. That prices fundamentally and actually have a mechanistic effect (significant) on how things are coordinated… i.e it is not supply control allocation
      2. That it is not the only measure or tool for economical coordination
      3. It is not an epiphenomenon of something else
      4. That it can be reasonably conceived as an information system
2. Price system integrates information, various types of information, and various mechanisms change this
   1. Ie Emotional Information
      1. Power – oligopolist 
      2. Supply and demand (roughly)
      3. Evaluation – Cognitive processes (individual), metacognitive organizational
         1. Cost 
         2. Value
         3. Risk
         4. Uncertainty
3. Price systems require money/ currency
   1. Cannot exist outside of a government, or at least require a large scale common trust and assurance to back it
   2. Signifier and signified
   3. Social Construction
   4. Presupposes private property and a division of the world 
4. Price system is a combination of emergence and design
   1. Path dependence 
   2. Not necessary to exchange, emerged out of need for exchange which was originally credit, and not monetarily based ,debt first
   3. Mathematical aspect and decisions matter
      1. Ie. counting – decimal vs penny, pence
5. Price is external attempts to create commonality of mental models of evaluation of economic state 
   1. In this way they are information integrators
   2. There is no common model for how prices of all things get integrated – need to do case by case bottom up and top down look to find mechanism
      1. Interview participants, psychology, complex systems
6. As an info system, the prices systems can be analyzed in terms of accuracy and precision
   1. Price systems are typically precise and not accurate – ie externaties
   2. Algorithm for precision and recall
7. ? Price systems operate/behave differently in economic periods of increasing/ decreasing returns
   1. Harold Innis
8. Price systems depend on measurement systems available and prevailing cultural beliefs of the world to be quantified
   1. Ie Romans
   2. Cannery, measuring fish
9. Markets & price systems share similar properties to science in the feminist empiricist interpretations in that it matters who the participants are in the system
   1. Social location standpoints matter and effect valuation, even if their could be an “objective” entropic measure of value
10. Price system, as any system, can display endemic properties
    1. Randomness
    2. Positive and negative feedback
11. An entropic/ roegenesque (?) measure of object value it the most promising, but no single definition is true, valuation is a multidimensional phenomenon which must be approached by listing firstly all separate interpretations 
    1. Ie marxist – time
    2. Mill – utilitarianism
12. As an information system, prices as info can be reformed visually to synthesize info better as it becomes more complex , and with more possible combinations
13. Neoclassical economics does not accurately capture the way to which individuals respond to prices.
14. Externalities can be, probably solved, by internal technocratic solutions, but deeper reform is more sustainable to allow for it to run by itself
    1. Too complex with too many interactions – Thomas Homer Dixon
    2. Needs to be a better synthesis of information coordination to simplify inputs & throughput
    3. Ie mail reform in UK – distance vs weighing as pricing
       1. Toyota Production System
15. What mechanisms are at work?
    1. Accuracy – ordinal – common mental models of participants?
       1. Propaganda / arts
    2. Precision – tools for measurement and quantification
       1.  Numeric. Sciences
    3. Interventions must
       1. Increase accuracy by changing mental models
       2. Decrease precision by limiting degree of quantification and quantifiable dependencies
16. Prices are not atemporal or ageoographical
    1. There are also major lags

Garbage in, Garbage Out