The primary (originating) purpose of doing this blog is to pursue organizing my thoughts and insights (historically gained from upon other’s shoulders) that will flower into an explanation (and sharing) of a meta-theory that I have been pursuing during the past 12 years.
One of my challenges is what to name this theoretical orientation, which frames the way folks go about their activities in their day-to-day world; yet may remain, possibly, consciously impervious to how their day-to-day activities are “controlled.” The holding name for this theory is BICEPT.
Here is a link to a graphical representation of the meta-theory: BICEPT, which is an acronym of six factors that define types of markets: Barriers, Information, Competition/Cooperation, Externalities, Private/Public, and Transaction costs. BICEPT can be metaphorically construed to be your bicep muscle with its ability to do work.
The weighting of the six BICEPT market attributes — using independent fuzzy scales — and then combined into a single measure can provide a “feeling” for how much a specific market will tend to be a member of the “free” market based on a scale of 0 to 1 (with 0 being the extreme “not at all a member” within a free market concept and the other extreme conclusively being 100% membership within the free market concept). A “free” market rating would tend to rest in the membership direction of (B) low barriers to get into the market; (I) information being easily available; (C) having a competitive advantage; (E) low negative external issues; (P) being private goods; and (T) low transaction costs once established in the market. At this time, there appears to be no single theory that encompasses all six market attributes that explain a market’s activity.
The underlying construct for BICEPT is Fuzzy Acceptance Theory wherein the use of multiple theories are combined and each theory provides partial supporting (membership) values rather than have theories arguably posited against one another. The following peer reviewed published article, Fuzzy Set Theory Movement in the Social Sciences, is provided as reference for the construction of the BICEPT meta-theory.
To follow are a three short examples demonstrating how separate theories can each provide partial explanation of market activity within the framework of BICEPT.
The Tiebot model is a political theory that focuses on mobility – voting with your feet. If you do not like what is offered, you go elsewhere. Tiebot’s theory falls into the Barriers “B” attribute of BICEPT. Low barriers will allow a higher opportunity for mobility, while a high barrier will create less mobility or less opportunity to enter another market area.
Agency Theory focuses on the relationship between two parties wherein one party is hierarchically referred to as the principle and the other as an agent. Thus, the resolution of issues would revolve around having persuasive information. Within the proposed BICEPT orientation, Agency Theory would be a member within the Information “I” component of BICEPT.
Competitive Advantage is a theory promoting how individuals and firms can have an opportunity to garner a larger share of the market over its competitors. This theory is a “C” component of BICEPT.
BICEPT can be conceptualized as a crystal with each of the six attributes cross connecting and holding the crystal matrix together. The crystal’s shape varies according to the strength of the components (theories) contributing to weighting each of the six BICEPT attributes. The three example theories (mentioned above) are attached their respective BICEPT links within the crystal structure each providing various strengths to the predictive power of how much they impact at least one of the BICEPT attributes and thereby contributing to the total understanding of the market’s shape.
The focus on markets (BICEPT) is only part of the story. BICEPT is the driving force (hidden hand) situated in Social Exchange Theory between types of governments varying from democratic to authoritarian, and how their decisions (laws, rules & regulations) impact markets, and in turn, how individuals and businesses will respond within the government’s ability to enforce their policies.