A great way to look at how value is created in interactions between autonomous actors is game theory. How do autonomous actors respond to other actors, is the core question here. How do you respond to an offer from a service provider? But also, how do they respond to you?
I have found game theory to be an effective model to think about the outcomes of sequences of interactions. This is because it clearly identifies the actors (or players) and their interests.
I use this all the time to think about me in relation to other parties that I choose to work with, or just have to work with. It also helps me to understand how parties and stakeholders act upon one another.
A game, in this view, has a number of players, who make moves that result in payoffs. The payoffs are defined by the rules of the game.
A simple example is tic-tac-toe, where players take turns (make moves) in marking an X or O on a 3x3 board. Whichever player first aligns three in a row wins. The win is called the payoff.
The digital infrastructures world has many examples and applications of this. One example can be found by looking at a simple provider-consumer relationship.
In this relationship, the provider pools resources such as bandwidth and servers for multiple consumers, and charges a certain price to them. The moves they make are setting a price and setting the size of the pool of resources.
The consumers’ moves, simply stated, are to buy the service from this provider, or not.
The rules of the game are that the more consumers use the same pool, the less performance they get, which reduces their payoff. Think of the cake at a birthday party: the more guests there are, the smaller the slice each gets. Note: this is an example of an externality (an outside factor that influences the value), which we discuss elsewhere.
The payoff for the provider is the amount of revenue they get. Having more users results in more revenue. The payoff for the consumers is the performance they get.