Hello all, I’m an Econ PhD-turned-founder and I worked on behavioral theories of centralization and division of labor. I’m especially interested in the history of production in market economics. Is there interest around here for a write-up on this sort of thing? I’m using it guide my thinking on my own project.
My guiding question is: how and why did centralized firms and factories emerge out of a decentralized market system? What mental models does this provide for thinking about crypto? Here are some behavioral angles:
Cognitive costs. Should we imagine a ‘sphere of indifference’ where it’s too costly/annoying for people to contract? Relevant for DAOs and DPoS, probably for prediction markets and futarchy as well.
Culture/Values. Groups can forms around shared values and some centralization emerges for coordination, messaging, reinforcement etc.
Power/authority. Once centralization exists incentives can change, analogous to Chris Dixon’s graph.
Commitment, teamwork, and agency problems. Effective division of labor starts requiring a number of workers that can’t be found in a family or even community, trust becomes a scarce resource.
Happy to discuss/collaborate.
Edit: Attached a first essay Introducing the problem of authority-based centralization (“Management”) in an economic context. What’s a Boss Final.pdf (385.9 KB)