Power Dynamics Through Q-Values

Stakes in a Transaction

• What is a transaction?
  • A transaction is an interaction between two parties, usually an exchange of things. It occurs because both parties believe they are better off when the transaction has occurred than when it has not
  • Examples of transactions
    • Eg 1. Buying eggs at the grocery store.
    • Eg 2. Trading a stock on the stock market
    • Eg 3. Accepting a job offer.
    • Eg 4. Entering a monogamous relationship.
• In a feasible transaction, both parties would rather transact than not. Transacting has higher Q-value than not transacting
  • $\Delta Q_A = Q(\text{party A, transact}) - Q(\text{party A, don’t transact}) > 0$
  • $\Delta Q_B = Q(\text{party B, transact}) - Q(\text{party B, don’t transact}) > 0$
  • Examples:
    • Eg 1. Both buyer and seller are comfortable with the price, so they transact.
    • Eg 3. A candidate feels they are better off with the job (as opposed to no job or a different job). a company feels they are better off with the hire (as opposed to no hire or a different candidate)
    • Eg 4. Both parties feel their life is better as a couple than as singles or with any other willing suitors.
• Unequal stakes, or power imbalance, in a transaction
  • When two parties may potentially transact, and one desires/values the exchange much more than the other. I.e. when the Q-value delta is much higher for one party than the other.
  • Examples:
    • Eg 1. I love eggs and desperately crave them. I buy them even though the price hasn’t dropped below $5 in months; or I buy eggs on sale even though it wasn’t on my grocery list.
    • Eg 3. I am new grad who desperately needs a job while hiring teams are indifferent any warm body from the struggling hordes; or I am an eternal grad student with rare technical skills desperately needed by AI companies.
  • Transactions in most reward systems are rarely perfectly balanced. There is always a high power and a low power party.
    • Eg 2. A resting limit order is willing to wait, a market order really wants to trade.
    • Eg 4. Every relationship has a reacher and a settler

What is Power?

• Do power imbalances matter? When and why?
  • Suppose the counterparties are not only deciding to transact, but which of a range of transactions to choose from. These transactions can be ordered by (i)$\Delta Q_A$; (ii) $\Delta Q_B$.
  • If the high power party notices the power imbalance, they can skew their offered transaction more to their favor.
    • Eg 3. Lowball a candidate with no competing offers; or pay through the nose for scarce talent if hiring the best in field is core to your business plan.
    • Mystery (to former me): Why do people want jobs instead of free money
      • Jobs are relatively power balanced transactions. Free money can be taken away.
  • Suppose transactions can be freely skewed within a feasible range: eg. A (the high power party) imposes a transaction fee on B (the low power party). Subject to the fee, $\Delta Q_A$ increases and $\Delta Q_B$ decreases. We could expect that the most power balanced transaction would occur.
    • Eg 2. A trade executes at mid price. Buyer and seller could theoretically trade at any price in the bid-ask spread but will meet in the middle because it seems fair.
  • Though there is often very limited flexibility to skew transactions.
    • Eg 1. Grocery store cashier won’t negotiate with me even though eggs are expiring. I only have power to buy or not buy, and hope this will spur them to decrease prices. I’m delulu
    • Eg. In the ultimatum game, the responder can only accept or reject an offer.
  • Both parties can have some power
    • Eg 4. both players in a cooperative game will be nice to each other if either can defect, even if one is more desperate than the other
• Power is the ability to influence the other party’s action.
  • Suppose I and another could engage in any of a range of feasible transactions, we choose one. If I could decline and offer a different transaction (possibly with worse terms, for them or for both of us) and the other party would still accept, I have power.
  • Eg 4. Partner quits smoking because you threaten to break up with them.

Is Power Good or Bad?

• Are power imbalances bad?
  • Low power parties are at risk of having their transactions skewed. They would still accept it. They reach lower value states and thus generally become even more desperate for state change, or less powerful. This effect feels kinda bad.
  • Are power imbalances are inherently bad? This view sounds like anarchy. I can think of benign and even inherently desirable power imbalances
    • Eg 4. A settler is not necessarily mean or neglectful to a reacher.
    • Eg. Managers have power over direct reports for organizational efficiency
    • Eg. I have phone screen timers to intentionally disempower my reptile brain
• Does power concentrate?
  • Power concentrates when the Q-value delta from a lower value state is higher than the delta from a high value state. The more a person has, the less they care. It is hard to think of reward systems that are not power concentrating.
  • In a rat race, high status people compare themselves to other high status people, and vie to reach the next tier status with constant desperation, no matter how much they have. Value concentrates, but noone ever obtains power
• Do you need power to affect change?
  • History seems to be written by powerful people/parties
  • What does it mean to affect change? To get an atypically desirable outcome.
  • An atypically desirable outcome likely requires a sequence of transactions in which you get the more favorable outcomes, among the feasible ones. It’s plausible to connect this with high power.
  • What does it mean to seek power? We can measure the power in a state (eg. aggregating power imbalances in current and future transactions). Seeking power is making power directly a part of one’s value function, rather than increasing power merely as a side-effect of maximizing long term value.
• What is scummy about power and power seeking?
  • Power is the ability to influence another party’s action. Why do you want to influence another party to do things they would rather not? Why does the other party want something different than you?
  • Maybe you are playing a non-cooperative game and somebody has to win it. Why do you care to win it? Do you think it’s better for you to win than them? Do you need to win rather desperately? Do you believe the game is fair and whoever wins deserves it?