Testing for the emergence of spontaneous order
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Testing for the emergence of spontaneous order Konstantinos Georgalos1 · John Hey2 Received: 7 December 2018 / Revised: 12 November 2019 / Accepted: 27 November 2019 © The Author(s) 2019
Abstract We report on an experimental investigation of the emergence of Spontaneous Order, the idea that societies can co-ordinate, without government intervention, on a form of society that is good for its citizens, as described by Adam Smith. Our experimental design is based on a production game with a convex input provision possibility frontier, where subjects have to choose a point on this frontier. We start with a simple society consisting of just two people, two inputs, one final good and in which the production process exhibits returns to specialisation. We then study more complex societies by increasing the size of the society (groups of 6 and 9 subjects) and the number of inputs (6 and 9 inputs respectively), as well as the combinations of inputs that each subject can provide. This form of production can be characterised as a cooperative game, where the Nash equilibrium predicts that the optimal outcome is achieved when each member of this society specialises in the provision of a single input. Based on this framework, we investigate whether Spontaneous Order can emerge, without it being imposed by the government. We find strong evidence in favour of the emergence of Spontaneous Order, with communication being an important factor. Using text classification algorithms (Multinomial Naive Bayes) we quantitatively analyse the available chat data and we provide insight into the kind of communication that fosters specialisation in the absence of external involvement. We note that, while communication has been shown to foster coordination in other contexts (for example, in public goods games, market entry games and competitive coordination games) this contribution is in the context of a production game where specialisation is crucial. Keywords Spontaneous order · Co-ordination · Production · Specialisation · Communication
Electronic supplementary material The online version of this article (https://doi.org/10.1007/s1068 3-019-09637-8) contains supplementary material, which is available to authorized users. * Konstantinos Georgalos [email protected] Extended author information available on the last page of the article
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K. Georgalos, J. Hey
1 Introduction The idea of Spontaneous Order—that societies can co-ordinate without government intervention—is mainly attributed to Adam Smith, but some think that it goes back further, even as far back as the fourth century BC, and the Chinese philosopher Zhuang Zhou who argued that “good order results spontaneously when things are let alone”. The idea was further developed by the French philosopher (and anarchist) Proudhorn in the nineteenth century, and played a major role in the thinking of the Scottish Enlightenment, being immortalised in Adam Smith’s Invisible Hand. Smith developed the concept of the division of labour and argued that rational
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