What are economic exchanges? The received view has it that exchanges are mutual transfers of goods motivated by inverse valuations thereof. As a corollary, the standard approach treats exchanges of services as a subspecies of exchanges of goods. We raise two objections against this standard approach. First, it is incomplete, as it fails to take into account, among other things, the offers and acceptances that lie at the core of even the simplest cases of exchanges. Second, it ultimately fails to (...) generalize to exchanges of services, in which neither inverse preferences nor mutual transfers hold true. We propose an alternative definition of exchanges, which treats exchanges of goods as a special case of exchanges of services and which builds in offers and acceptances. According to this theory: (i) The valuations motivating exchanges are propositional and convergent rather than objectual and inverse; (ii) All exchanges of goods involve exchanges of services/actions, but not the reverse; (iii) Offers and acceptances, together with the contractual obligations and claims they bring about, lie at the heart of all cases of exchange. (shrink)

There seems to be an overarching historical process in which life in small groups has evolved into life in large societies. This paper describes the design of a simulator for the study of that process. The simulator is named after David Hume (1711–1776), who presented a rich, informal, and still modern theory about the problems, useful inventions, and driving mechanisms in the evolution from small groups to large societies. HUME1.0 is a simulator that is meant to cover the interplay of (...) some key factors and forces in that process. The focus is on division of labor, possible gains from specialization, risky exchange with more or less distant others, possible fraud, moral control, and (at the next stage) establishment of monitoring and punishing authorities. Finally, we discuss the status, purposes, and relevance of simulators like HUME1.0 that create well-defined artificial worlds and allow for some (thought) experimenting with them. (shrink)