miscellaneous factZ – The online home of Rufus Pollock

Extracts from The Lessons from Lucasfilm’s Habitat, Chip Morningstar and F. Randall Farmer. A fascinating work which, unusually for computer scientists, is full of lapidary phrases and well-written prose.

The Problems of Central Planning (or, the dangers of being a pointy-headed engineer with his control variables)

There were two sorts of implementation challenges that Habitat posed. The first was the problem of creating a working piece of technology — developing the animation engine, the object-oriented virtual memory, the message-passing pseudo operating system, and squeezing them all into the ludicrous Commodore 64(the backend system also posed interesting technical problems, but its constraints were not as vicious). The second challenge was the creation and management of the Habitat world itself. It is the experiences from the latter exercise that we think will be most relevant to future cyberspace designers.

We were initially our own worst enemies in this undertaking, victims of a way of thinking to which we engineers are dangerously susceptible. This way of thinking is characterized by the conceit that all things may be planned in advance and then directly implemented according to the plan’s detailed specification. For persons schooled in the design and construction of systems based on simple, well-defined and well-understood foundation principles, this is a natural attitude to have. Moreover, it is entirely appropriate when undertaking most engineering projects. It is a frame of mind that is an essential part of a good engineer’s conceptual tool kit. Alas, in keeping with Maslow’s assertion that, “to the person who has only a hammer, all the world looks like a nail”, it is a tool that is easy to carry beyond its range of applicability. This happens when a system exceeds the threshold of complexity above which the human mind loses its ability to maintain a complete and coherent model.

Engineering Rule #1: Don’t trust anyone (because you can’t)

If, however, a computer game involves multiple players, delving into the program’s internals can enable one to truly cheat, in the sense that one gains an unfair advantage over the other players of which they may be unaware.Habitat is such a multi-player game. When we were designing the software, our”prime directive” was, “The backend shall not assume the validity of anything a player computer tells it.” This is because we needed to protect ourselves against the possibility that a clever user had hacked around with his copy of the frontend program to add “custom features”. For example, we could not implement any of the sort of “skill and action” elements found in traditional video games wherein dexterity with the joystick determines the outcome of, say,armed combat, because you couldn’t guard against someone modifying their copy of the program to tell the backend that they had “hit”, whether they actually had or not. Indeed, our partners at QuantumLink warned us of this very eventuality before we even started — they already had users who did this sort of thing with their regular system. Would anyone actually go to the trouble of disassembling and studying 100K or so of incredibly tight and bizarrely threaded 6502 machine code just to tinker? As it turns out, the answer is yes. People have. We were not 100% rigorous in following our own rule. It turned out that there were a few features whose implementation was greatly eased by breaking the rule in situations where, in our judgment, the consequences would not be material if people “cheated” by hacking their own systems. Darned if people didn’t hack their systems to cheat in exactly these ways.

Or they might just exploit your own bugs/features

In order to make this automated economy a little more interesting, each Vendroid had its own prices for the items in it. This was so that we could have local price variation (i.e., a widget would cost a little less if you bought it at Jack’s Place instead of The Emporium). It turned out that in two Vendroids across town from each other were two items for sale whose prices we had inadvertently set lower than what a Pawn Machine would buy them back for: Dolls (for sale at 75T, hock for 100T) and Crystal Balls (for sale at 18,000T, hock at 30,000T!). Naturally, a couple of people discovered this. One night they took all their money, walked to the Doll Vendroid, bought as many Dolls as they could, then took them across town and pawned them. By shuttling back and forth between the Doll Vendroid and the Pawn Shop for hours, they amassed sufficient funds to buy a Crystal Ball , whereupon they continued the process with Crystal Balls and a couple orders of magnitude higher cash flow. The final result was at least three Avatars with hundreds of thousands of Tokens each. We only discovered this the next morning when our daily database status report said that the money supply had quintupled overnight.

“Engineering” Rule #2: Keep Reality Consistent by Working Within the System Wherever Possible

One of the more popular events in Habitat took place late in the test, the brainchild of one of the more active players who had recently become a QuantumLink employee. It was called the “Dungeon of Death”. For weeks, ads appeared in Habitat’s newspaper, The Rant, announcing that that Duo of Dread, DEATH and THE SHADOW, were challenging all comers to enter their lair. Soon, on the outskirts of town, the entrance to a dungeon appeared. Out front was a sign reading, “Danger! Enter at your own risk!” Two system operators were logged in as DEATH and THE SHADOW, armed with specially concocted guns that could kill in one shot, rather than the usual twelve. …

One evening, one of us was given the chance to play the role of DEATH. When we logged in, we found him in one of the dead ends with four other Avatars who were trapped there. We started shooting, as did they. However, the last operator to run DEATH had not bothered to use his special wand to heal any accumulated damage, so the character of DEATH was suddenly and unexpectedly “killed” in the encounter. As we mentioned earlier, when an Avatar is killed, any object in his hands is dropped on the ground. In this case, said object was the special kill-in-one- shot gun, which was immediately picked up by one of the regular players who then made off with it. This gun was not something that regular players were supposed to have. What should we do?

It turned out that this was not the first time this had happened. During the previous night’s mayhem the special gun was similarly absconded with. In this case, the person playing DEATH was one of the regular system operators, who, accustomed to operating the regular Q-Link service, had simply ordered the player to give the gun back. The player considered that he had obtained the weapon as part of the normal course of the game and balked at this, whereupon the operator threatened to cancel the player’s account and kick him off the system if he did not comply. The player gave the gun back, but was quite upset about the whole affair, as were many of his friends and associates on the system. Their world model had been painfully violated.

When it happened to us, we played the whole incident within the role of DEATH. We sent a message to the Avatar who had the gun, threatening to come and kill her if she didn’t give it back. She replied that all she had to do was stay in town and DEATH couldn’t touch her (which was true, if we stayed within the system). OK, we figured, she’s smart. We negotiated a deal whereby DEATH would ransom the gun for 10,000 Tokens. An elaborate arrangement was made to meet in the center of town to make the exchange, with a neutral third Avatar acting as an intermediary to ensure that neither party cheated. …

These two very different responses to an ordinary operational problem illustrate our point. Operating within the participants’ world model produced a very satisfactory result. On the other hand, taking what seemed like the expedient course, which involved violating the world-model, provoked upset and dismay. Working within the system was clearly the preferred course in this case.

Conclusion: Decentralize Control to Allow for Evolution (or: don’t be a pointy-headed engineer who wants to control everything)

In a discussion of cyberspace on Usenet, one worker in the field dismissed ClubCaribe (Habitat’s current incarnation) as uninteresting, with a comment to the effect that most of the activity consisted of inane and trivial conversation.Indeed, the observation was largely correct. However, we hope some of the anecdotes recounted above will give some indication that more is going on than those inane and trivial conversations might indicate. Further, to dismiss the system on this basis is to dismiss the users themselves. They are paying money for this service. They don’t view what they do as inane and trivial, or they wouldn’t do it. To insist this presumes that one knows better than they what they should be doing. Such presumption is another manifestation of the omniscient central planner who dictates all that happens, a role that this entire article is trying to deflect you from seeking. In a real system that is going to be used by real people, it is a mistake to assume that the users will all undertake the sorts of noble and sublime activities which you created the system to enable. Most of them will not. Cyberspace may indeed change humanity, but only if it begins with humanity as it really is.

See summary analysis of the literature on corruption: Considering Corruption as well as the Political Honesty paper.

…. One of the tasks of transaction cost economics is to asssess purported bureaucratic failures in comparative institutional terms.

The basic argument is this: it is easy to show that a praticular hierarchical structure is beset with costs, but that is neither here nor there if all feasible forms of organization are best with the same or equivalent costs. Efforts to ascertain bureaucratic costs that survive comparative instiutional scrutiny are reported elsewhere (Willimson, 1975, chapter 7; 1985 chapter 6), but theser are very provisonal and preliminary. Although intertemporal transformations and complexity are recurring themes in the study of bureaucratic failure, much more concerted attention to these matters is needed.

Source: Transaction Cost Economics and Organization Theory; Williamson, Oliver; in dosi_ea_1998 p.29

The inefficiencies that result from compromise are illustrated by the design of the Occupational Safety and Health Administration (OSHA), (Moe, 1990, p.126):

If business firms were allowed to help design OSHA, they would structure it in a way that it could not do its job. They would try to cripple it.

This is not a hypothetical case. Interest groups representing business actually did participate in the design of the OSHA ….. [and] OSHA is an administrative nightmare, in large measure because some of its influential designers fully intended to endow it with structures that would not work.

To be sure, private sector organization is also the product of compromise. Egregious inefficieny in the private sector is checked, however, by competition in both product and capital markets. [Source: ibid p.30]

About

Review of John Braithwaite, Peter Drahos, Information Feudalism, Earthscan 2002. Read spring 2004.

Notes and Comments

1. Didn’t think much of this book.
2. Style was too polemical and wasn’t enough evidence to substantiate their claims. Much of the argument proceeded via an ad hominem approach:
   1. corporations like IPR
   2. corporations are nasty and selfish
   3. so IPR are bad (nasty and selfish)
3. this neglects a central point of capitalism: selfishness can work [note 1 below]. Capitalism works fine if people are loving and altruistic BUT IT ALSO works fine if people aren’t. The whole point of IPR is to incentivize innovation by allowing people to appropriate some of the returns. The central question is what is the optimal level of appropriation that you want not whether it is good or bad. And of course people want to freeload (generally those who aren’t doing the innovating) but if you allow that to go too far you end up with a tragedy of the commons. For freeloaders to freeload (pardon the loaded language) something has to be there to copy. But why did someone go to that effort in the first place? There are many reasons including the love of creation etc but for a lot of innovations/inventions, particularly those requiring significant investment, this is unlikely to be enough.
4. To be fair B&D know this: ‘Efficiency in the case of intellectual property rights is generally thought to involve a balance between rules of appropriation and rules of diffusion. Overly strong intellectual property rights leads to the problem of excessive monopoly costs of intellectual property rights, whereas weak protection leads to the problem of excessive free-riding and therefore underinvestment in innovation. The difficult trick for any legislature is to find a balance between rules of appropriation and rules of diffusion.’ [p. 13]
5. But they never really address this thorny issue head on but attempt to get at it indirectly by arguing that an imbalance in bargaining power and the shady shenanigans of the multinationals imply that the resulting outcomes MUST be biased in the wrong direction (see e.g. following paras on [13] to one just cited + rest of the book).
6. This may be an attractive route but it has many pitfalls. We have assumed we can’t even accurately work out the socially optimal level of patent protection in the first place. But then it is going to be more difficult to work out (with appropriate considerations for informational and transactional constraints) where on this unknown scale of optimal protection we end up with the current distribution of bargaining power.
7. Nevertheless it possesses attractions. If producers and consumers have different interests and producers have all power we are not likely to end up with the optimal outcome.
8. ‘In order for democratic bargaining to take place among sovereign states, at least three conditions need to obtain. First all relevant interests have to represented in the negotiating process. … (This …. does not entail the participation of all at every stage …) Second, all those involved in the negotiation must have full information about the consequences of various possible outcomes …. Third, one party must not coerce the others.’ [14]
9. ‘Ours is not an anti-intellectual property tract. It is an argument against the domination of the intellectual property standard-setting process by a corporate elite that, for close to a century, has played the knowledge game with great social costs.’ [15]
10. Comments such as previous seem very reasonable. However they are let down by shoddy reasoning and a lack of evidence. The very strength of these claims makes one cautious. How does on calculate the social cost? What level of innovation and diffusion would their have been under a different regime. This is not to argue that things should not be different. I personally think they should but a far more careful analysis is needed. A classic example of slipshod analyis is provided by: ‘The truth is that current intellectual property regimes do a very poor job of chanelling rewards (and therefore creating incentives) to creators. The bulk of intellectual property rights are not owned by their initial creators but by corporations that acquire intellectual property portfolios through a process of buying and selling, merger and acquisition.’ [15] This is a complete non-sequitur and all too representative. The whole point is that there is a market system for innovation in which innovations are bought and sold. The personal ownership by the innovator is no important to the optimality or not of the system than a requirement that you should only eat food you have grown yourself. Alienation from the product of your labour is irrelevant. Whether you get paid and how much is what matters.

[1] ‘It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love.’ Adam Smith, … Wealth of Nations, Book One, Chapter 2: Of the Principle which Gives Occasion to the Division of Labour.