A paper in the latest flash from the Social Science Research Network’s International Political Economy section provides an excellent opportunity for agent-based model (ABM) testing. The paper, entitled Socially Inclusive Networks for Building BOP Markets explores how relationships among poverty groups and market forces affect the economic viability of these groups.
Little is known about the collaborative arrangements required to fairly and effectively employ market mechanisms to link the “base-of-the-pyramid” (BOP) with the disparate worlds of companies—especially large firms and multinational companies.
To study these relationships, the authors propose three central questions. First, what are the factors that motivate market leaders to explore non-traditional investment areas? Then, how do these relationships operate? Finally, what are the affects on the actors’ performance based on these relationships? The authors investigate these questions by examining several case studies, and develop a model for “socially inclusive networks” defined as, “horizontal arrangements in which all parties share responsibility for performance outcomes, without any one party exercising authority or control over others.”
While the authors present an interesting set of findings based on the data from the case studies, this model is begging to be explored computationally. ABM of varying degrees of complexity could be constructed to explore several of the questions the authors conclude with, as well as reinforce or redirect their initial findings. The advantage to using an ABM is the model would help inform our understanding of what network dynamics produce the most beneficial outcomes for all of the stakeholders. I believe many IPE questions related to poverty have a great potential for testing using ABM. There are several excellent examples of this here, with my favorite being the micro-credit model.
I need to brush up my NetLogo and SimPy, but this could be a very interesting side project.
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In his “The Post-American World”, Fareed Zakaria paints a very different new world order, or as you might say, alternate model of power dynamics. He refers to a statement by Secretary of State James Baker, who suggested in 1991 that the world was moving to a hub-and-spoke system, with every country going through the US to get to its destination. Zakaria suggests that “the twenty-first century world might better be described as one of point-to-point routes with new… patterns being mapped every day.”
This suggests to me that sooner rather than later the behavioral sciences and computational sciences must work together to create a more practical world view.
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I think there is truth in what Zakaria states. The “spoke and wheel” model is essentially what all contemporary physicist studying networks have bought into (Barabasi, et al).
I think there are many layers, and every hub probably contains the pyramid describe here, which makes it worth studying.
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