Spontaneous Order

Konstantinos Georgalos and John Hey

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 a crucial 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.

Paper

Can be found here.

data (MS Excel , 421kb)

Experimental Software

Experimental Software ( 29,074kb download) contains the exe file produced from the Python program written by Georgalos. He may provide the raw software on request.

Data

The data (MS Excel , 421kb).

Instructions

This Instructions (zip , 5,699kb) is a zip file containing the Instructions for all the treatments and communication scenarios.