Discovery and Social Learning in Non-Priced Environments : An Austrian View of Social Network Theory

Our purpose here is to engage in a cross-disciplinary discussion between Austrian economics and social network theory. In particular, we ask what role social networks play in the extended order, in regard to both individual discovery and whether social networks can be the source of widespread unintended cooperation among individuals unknown to one another. Though Austrians have examined the function that market prices play in generating social cooperation, such discussions tend to steer clear of non-priced environments, such as interaction within social networks. We seek to explore this gap. While we acknowledge that non-price information feedback mechanisms such as status and reputation lack the calculability so crucial to market coordination, we argue that they can nonetheless mimic other important qualities of market prices and generate widespread unintended social cooperation among people unknown to one another. After a general discussion, we apply these ideas to online philanthropic communities