Multi level marketing

Pyramid schemes, Ponzi schemes, Newcomb unboxing

October 2, 2022 — October 2, 2022

collective knowledge
cooperation
distributed
game theory
how do science
insurgency
networks
probability
sociology
statistics
wonk

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Figure 1

Notes on various schemes in the vicinity of multi-level marketing. Although I would like to be broader than that.

I am not interested in selling perfume in a pyramid scheme, but I’d be lying if I said my life was completely divorced from such things. After all, academia has many characteristics of such a scheme ().

1 Nondeterministic pyramid schemes

What about undecidable MLMs, where if the scheme succeeds then everyone wins, but if it fails only the early adopters do? In that case, what even is it? Or more general examples of games that are potentially positive-sum? Maybe doubling down on technology to solve global crises is an instance of such a scheme. Maybe cryptocurrency is an instance of such a scheme.

Over in the anthropic principles section, I wondered about that in the context of the Hobart essay, Sin, Secret, Series A. Every startup needs to know something where it is argued that many startups are nondeterministically Ponzi schemes. If their founding myth comes true and they attain market dominance, they do great. Otherwise…

Question: what does evidential decision theory say about such things?

2 Anthropic principles in

Figure 2

Where in the hype cycle do you encounter a product? Which is the most likely level that you will join a Ponzi scheme? See anthropic principles.

3 Credit networks as

See financial stability.

4 Game theory

Looks a little like the minority game? Asymmetric information games? I imagine someone has done this.

5 References

Afonso. 2014. “How Academia Resembles a Drug Gang.” SSRN Scholarly Paper.
Caldarelli, Chessa, Pammolli, et al. n.d. “Reconstructing a Credit Network.” Nature Physics.
Cornelius-Bell, and Bell. 2021. “The Academic Precariat Post-COVID-19.” Fast Capitalism.
Eom, and Fortunato. 2011. “Characterizing and Modeling Citation Dynamics.” PLoS ONE.
Filimonov, and Sornette. 2012. “Quantifying Reflexivity in Financial Markets: Toward a Prediction of Flash Crashes.” Physical Review E.
Filimonov, Wheatley, and Sornette. 2015. “Effective Measure of Endogeneity for the Autoregressive Conditional Duration Point Processes via Mapping to the Self-Excited Hawkes Process.” Communications in Nonlinear Science and Numerical Simulation.
Galbiati, Delpini, and Battiston. n.d. “The Power to Control.” Nature Physics.
Hardiman, Bercot, and Bouchaud. 2013. “Critical Reflexivity in Financial Markets: A Hawkes Process Analysis.” The European Physical Journal B.
Hetzer, and Sornette. 2013. “An Evolutionary Model of Cooperation, Fairness and Altruistic Punishment in Public Good Games.” PLoS ONE.
Kaushik, and Battiston. 2013. “Credit Default Swaps Drawup Networks: Too Interconnected to Be Stable?” PLoS ONE.
Lux, and Sornette. 2002. “On Rational Bubbles and Fat Tails.” Journal of Money, Credit and Banking.
Shleifer, and Vishny. 1997. “A Survey of Corporate Governance.” The Journal of Finance.
Sornette, Maillart, and Ghezzi. 2014. “How Much Is the Whole Really More Than the Sum of Its Parts? 1 ⊞ 1 = 2.5: Superlinear Productivity in Collective Group Actions.” PLoS ONE.