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Approach
So, you shop somewhere. Or you buy a product you haven’t seen before. The business you just patronized thinks they have a “new customer” and they value this highly. Creating new customers is expensive, 7x more than retaining a customer. However, you get an email from the app saying, “We noticed you purchased X from Y. Did you know…"
You advise the merchant (or not) of your intent not to do further business w/them. A simple button press will do it.
Or, you can ask the app to examine a potential purchase, just as Evernote can clip, you could clip a potential page with your purchases teed up and get feedback in a few minutes on the implications of your purchases. Or right click on a product or brand in a browser.
Looking for a coffee shop? Let the app know. "Starbucks is right here, but I recommend a locally owned shop half a block further down."
The aggregating economic decisions of even 20 million consumers, if nudged towards an end, could have a big impact on the market. Competition at the margins could drive corporate behavior. P&L managers scratching for that 0.25 basis point increase lose their bonus. Could start to move stock valuations and bring pressure to bear on the 1% where it hurts. Leverage.
Need views of economic & market professionals on this hypothesis.
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“I try to shop responsibly but it’s so hard"
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“It’s too complicated to keep track of who is evil & what I should avoid & what I can buy"
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“Sometimes I’ve got no choice but to go to Wal-Mart"
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"Scan barcodes with my phone in the grocery store? With a screaming toddler in the cart and 15 minutes to pick up my husband? Are you KIDDING?"
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OK so I read this article and decide to boycott FedEx… but does that mean I should use UPS?
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Or are both equally bad?
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What if USPS is not a choice?
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If not a perfect decision, how can we at least make a better one??
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As a user of the application, I have to choose regularly between shopping at Target and Walmart. I have no other options. I want quick and simple guidance, given my values. Are both equally bad? How can I know?
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Or Perkins and Waffle House. Or Coke and Pepsi.
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Job to be done: trying to make the best choice of a restaurant, market, gas station, coffee shop, etc.
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Job to be done: seeking insight into if/how their purchases reflect their values and how to improve over the next time period (week, month, year)
The app is an always-on coach to help you make better economic decisions, reflecting both your social values and the realities of your life. It will be available as mobile, Web, and as an API (for other applications to build off of). This is not (at first) about investment. Social screens are well understood. But many people don’t have money to invest. It’s more about daily economic decisions.
There are distinctions within the 1%. Kochs, Coors, Adelsons, Marriott, vs. Ben & Jerry, Branson, Musk, Gates, Buffet. Even Coke v Pepsi. We can quantify a social credit rating for the corporation reflecting this. It will be a 300-900 point score just like consumer credit ratings, unless there are IP issues with the credit bureaus on this.
The app would cover both channel (e.g. Target the retailer) as well as product (e.g. Pringle’s potato chips)
To generate the corporate social credit rating, we would use:
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social screening data from investing firms
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political contribution data
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voter scorecards
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interlocking directorate data (whorulesamerica & similar data sets)
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legal (criminal & civil) and regulatory action data
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corporate and investment firm ownership
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physical property ownership
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text analytics on news sites & social media sentiment
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mobile geolocation/geofencing
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voluntarily released tax information
The consumer would also have a social credit rating, driven by their economic interactions with the corporations. To derive their social credit, we would examine their transactional activity:
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direct transactional data from their banks & credit cards (Quicken and many others have pioneered the techniques here)
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contactless e-receipts
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email (e.g. TripIt scans emails and harvests travel information)
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scanned documents
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aggregator sites such as Mint.com & Creditkarma
if you have to purchase X, fine, but consider purchasing X from Y instead of Z. etc.
Some will cringe at talk of credit rating, marketing, social media, apps. The argument is yes, we are using the master’s tools. turning the lemons we’ve been given (alienation, atomization) into something better.
We’re using our own data - privacy & control
In your economic decisions, there are no singular fatal flaws for either the customer or the corporation. Reality is multi-dimensional and the aggregrate rating reflects a wide variety of concerns, just like your consumer credit rating is based on multiple factors. Scoring is weighted and aggregated with an algorithm. Just like a real credit rating. This is the only way we can help people w/decisions like "Target vs Wal-Mart." Target isn’t perfect, but in general it would score (e.g.) in the 600 range, while Wal-Mart is down around 450 (speculative examples).
If you were traveling through a small town and had to stop at the Wal-Mart, so be it. The trouble from a behavioral econ point of view is the lack of a counteracting nudge that you want to do that as little as possible.
In order to calculate a scalar credit rating, the application must be based on a clear set of values. Consumer credit ratings are based on a set of values such as "paying off debt reliably is good" and "seeking credit is b ad." A basic set of values for this app might be:
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Human existence is a good thing
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The human race is worth saving
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We should seek the greatest good of the greatest number
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The UN Universal Declaration of Human Rights is a good starting point
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Education and freedom of the press are critical for democracy
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Global warming is an existential threat
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Wealth and income inequality have reached unacceptable ratios
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The US has an unpaid debt to its black citizens
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The human race thrives when women are empowered
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Racism, sexism, homophobia, and other forms of structural oppression are to be opposed
We are opposed to:
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The Republican Party of the US and its supporters
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Charles and David Koch and their political network
In order for the app to work, we will have to quantify these values. Additionally, the application could be parameterized - people can tune for non-core concerns. Personally, I consider gun control and animal rights to be non-core; I have seen both of these issues divide progressives too many times. In the US, we need to be able to make common cause on the environment with hunters.
Personal note: I was involved with the early Green Party platform. This ultimately resulted in far too lengthy and non-actionable work. This app will not get bogged down in minutiae. In my view, there is great value in a simple set of core values, and diminishing value in extensive, speculative policy formulation. If possible, the app’s values should be based on existing value sets such as the UN UDHR.
The application would be advertising-based, with a sliding scale based on credit rating. Your credit rating appears on your ad. Your local co-op probably can advertise for free. But we’ll take money from anyone, Even the Kochs with their score of 300. Anyone with a score that low pays proportionately, somewhere around a thousand dollars an eyeball.
App could be tuned for degree of intrusiveness. Everything from once a year audits of finances, to real time coaching based on geolocation or interactive examination of prospective economic activity.
Some steering committee would be required to steward the core values and how they are translated into an algorithm.
Start in a city…?
We believe that the opportunity is asymmetric. There will probably be a right wing copycat. But it will not be as numerous or effective.
The economic weight of this country’s intelligentsia, and the weakness of "Real America." Red vs blue state economics.
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How to Measure Anything
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Nudge
need more on behavioral econ, neurosci, etc