- The proliferation of communities of collaboration is creating significant problems for traditional conceptions of productivity and value. Indeed, the application of conventional value metrics is increasingly problematic not only in CBPP, but more generally in information and knowledge economics. New definitions of value are necessary in order to evaluate the contribution of the wide diversity of productive activities. However, the question of value in collaborative communities is not only an economic one, but also a question of justice. The problem of how to regulate and reward activities that are presently without a market value (e.g. the externalities produced by Free Software for the software industry) is contingent on the ability to find a rational and transparent measure of value.
Very nice site!
Very nice site!
Dimensions of Value
The value equation contain different dimensions.
Kurt: I much prefer the idea that a value topology can be created where the resolved value of multiple dimensions of value define a point in a value space - see http://mathworld.wolfram.com/Dimension.html. Some candidate dimensions to consider can be found here: Value Mind Map proposed by Kurt.
Principles of good dimension proposed by Kurt:
- They are meaningful
- Their meaning is conveyed to non initiates reasonably accurately
- They are composable
- Some dimensions are functions of other dimensions
- They are orthogonal
- Their meanings do not overlap at a given level of composition
- They are measurable
- This may be directly measurable (in a mediated environment), or resolve to a measure based on human evaluation processes
- Ideally they require no effort to track beyond doing the thing that is being measured
Remixed from p2pValue project, see resource:
(...) six diverse dimensions of value are distinguished: community building, objective accomplishment, monetary value, Social use value, Reputation, and ecological value. An ethical dimension of value? (...) communities’ members do consider themselves part of the movement aligned with the ethics of free sharing of knowledge
Beyond differentiated dimensions of value, another angle to approach value is the subject that relate to it. Value can be assessed depending on its approach: from an individual perspective, community perspective, or society perspective. Individual values can refer to more fundamental principles or beliefs, which are related to moral or ethical values. (...) ideological values such as privacy, freedom of expression, and individual agency or autonomy. The kind of value that communities create for individuals that is considered as most important is knowledge sharing. Other important types of value are: learning; coherence with own ideology; and community building.
Type of value created
We can speak about
- Social value (something that benefits a larger group of individuals)
- Use value (infrastructure development, creating tools for the group, etc.)
- Exchange value (a product, something that can be exchanged/traded)
- Ecological value (something that benefits or at least preserves the environment)
Material products are 'exchange value'. They have design costs (mostly time and require some infrastructure and tools), high costs of reproduction (which can be reduced by increasing the volume if standardized - mass production), and high costs of distribution (the "last mile" of transportation usually scales with volume). Production of material goods require (specialized) equipment, necessitates raw materials or components, and requires time, (specialized) knowledge, and know how.
- High tech products - Ex. consumers electronics, scientific instruments, etc. Subject to a fast innovation rate.
- Low tech products - Ex. mechanical tools, mousetraps, etc. Possibly subject to high level of competition.
- Food - Ex. fruits and vegetables, etc. Time sensitive for perishables, high turn rate.
Immaterial transferable products
Immaterial transferable products have design costs, very low costs of reproduction, and very low costs of distribution. Their use may require customization and learning.
- Cultural artifacts - paintings, sculptures, music, etc.
- add others
Immaterial non-transferable products, or services
The cost of production is high. There is no reproduction per say, every service is unique. The costs of production scales with the volume.
- Consultancy - Ex. business consultancy
- Hosting - Ex. room/house sharing
- add others
Value in use is not always equivalent to value in trade is not always equivalent to cost of production. Jean Francois Noubel puts it nicely by saying there are moveable value, measurable value, tradeable value, acknowledgeable value, and possible value.
Behind all human endeavors are value systems. Humans are moved by the value they perceive AND by their understanding of how to get to it. They forge relations among themselves and coordinate their actions in ways to increase the probability of getting to the value they perceive, to increase their well-being in doing so, as well as for other reasons.
Value is created, transformed, exchanged, consumed and destroyed. Individuals invest different types of assets during these processes.
Value Mindmap - by Kurt: http://www.mindmeister.com/86243784/value
Value synchronization generates dynamically stable patterns of social systems. The same way complex physical systems exhibit self-organization when energy/matter is exchanged with the environment, value networks (the thing we are building that are composed of peer relations of co-creation and co-production) self-organize when value is expressed and acknowledged (accounted and reciprocated) with the environment. Understanding value leads to successful designs of value systems with well-behaving attractors, which manifest themselves by high creativity, high productivity AND a good feeling (positive reinforcement) about being part of such systems.
Value system models may combine three main approaches to design value networks - living system/ecosystem view, - the game-theory - individual view - the ethical/philosophical collective view
Kurt Some forms of value are readily converted into others. Some conversion paths are not possible. Art Brock uses tradeable, measurable, rankable, nameable, possible wealth. Another reference from Farmer - Kidtrade paper emphasizes the difference between tradeable and non tradeable goods. The example given is that people would not be comfortable with people buying a reputation score, especially if that reputation score was based on service, good deeds what have you. Allowing this would in fact destroy the reputation system, as its meaning would be called into question.
There are some things that money can't buy, and this is truly an opportunity for value accounting systems to chase after and define metrics or metacurrencies for the those other things. The question really is what does reputation buy? The answer depends on the project's value equation and intrinsic need for that reputation. There is another question which is what are the dimensions of reputation, to further understand its meaning. Reputation is arguably measurable but not tradeable. Noubel goes so far as to say there are some things that aren't even measurable, like love, but they can in fact be acknowledged.
My goal has always been to identify a workable set of dimensions of value, that are simply and as universally as possible understood - to define measures for them and to articulate the relationship between them. It can of course be made more complicated like when you want to break down reputation into its inputs, and when you start taking contextual information into account.
There are causes and conditions that produce value, value in use of the thing produced, and the causes and conditions that create the potential of value being produced - the contextual probability of adding value. VAS must provide incentives to attract the causes and conditions that create the probability of adding value.
Example: Reading a book adds no value to the network. The knowledge created (if relevant to the context) has value if tangibly available (*attention, *concurrence from someone with that knowledge in a context where it is relevant and needed).
Attention (engagement) has no value in and of itself, before anything is done.
Much of value remains tacit, then it becomes perceived, usually when it is applied and converted to more tangible forms, from which we tend to project its future value (rightly or wrongly).
There are two ways to perceive tacit value potentials, by them being identified as necessary to the project at hand (we need X for the project), and by them being surfaced through conversion to more tangible forms of value (X can do Y in the project).
There are a number of dimvals that speak to the value potentials more directly. Knowledge is something we need to entice. *Surfacing relates to the realization of bringing knowledge into context. *Influence is something we need to entice. *Relationship is the realization of influence and *Introduction is its vector. The question remains of how to measure *influence. Klout and its peers are trying to do that. We need to sort this out. It is a very hard problem.
We tend to believe that things have a priori value because we can reference almost anything to the market and associate a price to it. For example, we take 1 hour of work doing R&D in electronics and equate it with 50$ (market price on the labor market). We take 1L of soape consumed in the same R&D process and assign value to it in the same way, by looking at its market price in $ at 10$. Almost everything we use and do can have a price associated with it, which comes from the current market, and that gives us the impression that things have intrinsic value. That market price is actually given by a market-based process (very complex and emergent), which fixes the relative value between things, in a given context, which is after generalized to other contexts causing all sorts of problems. Something can have a 10$ market price and ) value for me, I would never take it even if it was free. In other words, that thing doesn't have an intrinsic value, or is not valuable in a universal way. We refer to the actual market to assign value to things, but that's just a reference to a particular system for evaluation, one way to assign relative value to things among others, which doesn't satisfy everyone out there in all contexts.
Crystallization of value occurs in a market driven system by a transaction, a payment. These transactions cover intermediate steps in the value chain as well as sale for consumption. Pricing determines how much each step is 'worth' ($50 per hour for labour, $20 for a widget).
Crystallization of value in a value network is through consumption or through use in a value added process that ultimately results in consumption. There are no transactions, only record keeping. The value equation determines how much each step is 'worth' relatively for pricing in any abstract currency or currencies.
The hybridization of the value network and the market system during transition means that an eventual sale or pricing in the market (actualization of value at the edge of the network) in terms of an abstract currency allows that currency to be distributed according to a value equation (evaluation causes flows). It is the evaluation of an intermediate or final product of a value chain in terms of a currency that causes the value adds throughout the value chain to be priced in that currency. This is a way of dealing with the indeterminate nature of the 'value' of each step in the value chain at the time it happens.
Consumption needn't be priced in currency. It could be priced in resources consumed (either by reference to the final form, the chair or by reference to the inputs (skilled carpenter time, forester, mill, transport, energy consumption etc)). While a monetary system is perhaps 'simpler' on the face of it, it is in fact an illusion because the monetary system is quite complex and introduces value manipulations and allows a bleeding off of value to those who run the currency.
We can also look at the difference in terms of how risk is taken and ultimately how reward is distributed.
When someone pays for an intermediate result or 'input', they take on the risk that the use of that resource will allow them to produce a return. The party selling the resource has traded the risk of developing that resource further for the certainty of a price in the currency of choice. It is the difference in opinion on the future value of that input and a difference of skill set to develop that input that cause the transaction to take place. The problem is that an information gradient can cause distortion in prices.
If I know I can sell consulting services at $140 an hour and you do not I can pay you $80 an hour and sell you for $140. In today's market that is called recruiting and it is a legitimate business.
If one takes the hybridized value network approach to this scenario, there is no need for the intermediate transaction (the $80 per hour). It is the consumption of services that crystallizes the value and triggers evaluation in the currency of choice. The value equation between the recruiter and the skilled labour is explicit and the $140 per hour will be divided between the parties. It may end up being the same split, but there is no hiding of information, and that makes all the difference.
In the pure value network scenario there is no $140 per hour, only an accounting of what is done with the hour and its agreed upon evaluation method (the value equation). The folks that made that value add possible are the skilled labour and the recruiter (and the recruiter's spouse who cooked them breakfast and the skilled labourer's mentors and instructors etc etc to the boundaries of the value accounting system).
Pricing, it seems, permits a lack of information about the past inputs and future usefulness of a given intermediate result. This is quite a useful property, but it is a shortcut with consequences.
I hope we can minimize the subjective evaluation, or at least make it explicit in the value equation rather than unknown in people's heads.