Exchange

slug: exchange

one_liner: Reciprocal transfer between parties under mutual commitment, with each side's movement keyed to the other's.

aliases: trade reciprocal_transfer swap

review_flags: ACCEPTED as a prime from project-06 (Kurt, 2026-05-29). Promoted from candidate; review_flag history below.

review_flags: CANDIDATE from project-06. CONVERGENT signal: Claude flagged this gap in R6 ("transaction_costs PARENTLESS — transaction_costs->`transaction` was a NAME COLLISION, transaction is the CS/DB sense"); ChatGPT Pro's independent one-shot pass (2026-05-28) surfaced the same gap and named it `exchange`.

review_flags: Would parent: transaction_costs, gains_from_trade, liquidity, price_mechanism, comparative_advantage — and more broadly any reciprocal-transfer phenomenon currently parentless because `transaction` is the wrong sense.

review_flags: Distinct from `allocation` (which assigns a limited supply among claimants and need not be reciprocal) and from `cooperation` (which exchange need not be — exchange can be adversarial, strategic, or purely protocol-governed).

review_flags: substrate_independence scores are PROPOSER estimates, pending triangulation.

review_flags: 2026-05-28 schema reformat: original project-06 v1 used the 5-section template (Core Idea / Broad Use / Structural Signature / Distinction from Neighbors / Notes); reformatted to the canonical 8-section runbook v1 schema. Structural Signature content folded into Manages Complexity + Abstract Reasoning; project-06 load-bearing rationale preserved in Notes.

core_idea:
Exchange is the structural pattern in which two or more parties transfer goods, services, rights, information, obligations, or symbols to each other under mutual commitment, with each party's transfer conditional on the other's. Whether the medium is money, nectar, an API payload, a treaty clause, or a ceremonial bracelet, the relation has the same shape: both sides move, and each side's movement is keyed to the other's. The classical economics literature, beginning with Smith's (1776) treatment of the propensity to truck, barter, and exchange, isolates this pattern as the substrate on which markets and prices are built rather than as a synonym for either. <!-- FACT-D56-136 -->[^smith-1776]

Exchange is not money, and it is not a market. Money is one possible *transferable* and markets are one possible *recognition context*; neither is constitutive of the relation. Mauss's (1925) study of gift economies in archaic societies, where strict reciprocal obligation operates without prices or money, secured the broader frame: the invariant is reciprocal transfer under recognized terms, and the substrate (currency, ritual, protocol, biology) is incidental. <!-- FACT-D56-137 -->[^mauss-1925] Once the relation is named correctly, a market trade, a pollinator-plant mutualism, and a TCP handshake become substrate-specific instantiations of one pattern rather than three unrelated phenomena.

structural_signature:
Exchange encodes a five-role structural pattern: **parties → conditional transferables → recognized terms → enforcement context → completion condition**. It separates a pre-exchange state (each party holds what they will give up; neither holds what they will receive) from a post-exchange state (each party holds what was transferred to them) and names the bilateral move that connects them, with the crucial constraint that each side's move is contingent on the other's. Walras's (1874) equilibrium framework formalized the role-structure for the market case, but the roles themselves are substrate-neutral. <!-- FACT-D56-138 -->[^walras-1874]

**Recurring features:**

- Two or more parties each giving and receiving
- Transfer conditional on counter-transfer
- Mutually recognized terms governing the move
- Bilateral commitment under an enforcement frame
- Completion condition that closes the episode
- Composable into chains, networks, and markets

The signature is robust across substrates: a bee and a flower exchange pollination for nectar under co-evolved signal terms; two processes exchange request and response under a protocol; two states exchange prisoners under a treaty; two clans exchange marriage partners under kinship rules. Each instance has the same five roles, and the analyst can interrogate any exchange by enumerating them.

what_it_is_not:
Exchange is **not** money, markets, or prices. Those are *features of certain exchanges* — specific transferables, specific recognition contexts, specific term-encodings — but the relation predates and outlasts them. Polanyi's (1944) historical analysis of pre-market reciprocity and redistribution shows that human societies organized large-scale exchange long before market institutions existed and continue to do so alongside them. <!-- FACT-D56-139 -->[^polanyi-1944] Collapsing exchange into market-exchange erases gift economies, biological mutualism, protocol message-passing, and ceremonial reciprocity from the analytic field.

Exchange is also **not a one-way transfer**. A grant, a gift with no expected return, a tax, an inheritance, a theft, and an allocation are unilateral movements — one side gives or loses, the other receives, and the receiving is not conditional on a counter-move. The defining feature of exchange is bilateral conditionality: each party's transfer is keyed to the other's. Where the conditionality is absent, the relation is some other pattern (gift, allocation, expropriation, donation).

Exchange is **not** the same as a single record of a transfer. The discrete event — the database row, the receipt, the log entry — is what computer science calls a transaction. The broader bilateral relation, with its conditional structure and recognized terms, is exchange. Treating the record as the relation collapses the structure into a snapshot; treating the relation as a record loses the conditionality and the term-governance. The catalog distinguishes them deliberately.

Exchange does **not** require cooperation, friendliness, or shared goals. Adversaries trade, hostage negotiations are exchanges, prisoner swaps occur between states at war. North's (1990) institutional analysis emphasizes that exchange can be sustained by enforcement and credible commitment even between parties with deeply opposed interests, provided the recognition context binds them. <!-- FACT-D56-140 -->[^north-1990] What exchange requires is mutual conditional commitment under recognized terms, not goodwill.

Finally, exchange does **not** entail symmetry of value, kind, or power. The transferables on each side may differ radically (nectar for pollination services, money for goods, information for access), and the parties may be sharply unequal in bargaining position. What is symmetric is only the structural fact that both sides move and each move is conditional on the other.

broad_use:
**Economics**: Market trade, barter, contract, gains-from-trade, transaction costs as friction on the exchange process, comparative advantage as the gains-structure available to bilateral exchange between differently endowed parties; Ricardo's (1817) comparative-advantage analysis is a theorem about what *exchange* makes possible, not about markets per se. <!-- FACT-D56-141 -->[^ricardo-1817]

**Anthropology**: Gift exchange, ceremonial reciprocity, kula rings, bridewealth, dowry, hospitality conventions, with Sahlins's (1972) typology of generalized, balanced, and negative reciprocity drawing the analytic line between open-ended response-in-kind and the structured terms-governed forms that count as exchange in the structural sense. <!-- FACT-D56-147 -->[^sahlins-1972] Malinowski's (1922) ethnography of Trobriand kula made the point definitively: a structured reciprocal-transfer relation can be elaborately formalized without money, prices, or markets, and the analytic vocabulary of exchange applies directly. <!-- FACT-D56-142 -->[^malinowski-1922]

**Diplomacy and international relations**: Treaty obligations, prisoner exchange, sanctions-relief deals, normalization agreements, arms-control verification. Each party's compliance is conditional on the other's; the terms are codified; the enforcement context is the international system; completion is verified by inspection or behavioral observation.

**Computer science**: Protocol-mediated message exchange (TCP handshake, HTTP request/response, RPC), distributed-system consensus protocols, cryptographic key exchange, payment-rail settlement messages, database two-phase commit between systems. Each side sends conditional on the other; the schema is the term-set; the protocol stack is the enforcement frame; the ACK is the completion condition.

**Biology**: Mutualism (pollinator-plant, mycorrhizal fungi-roots, cleaner-fish and host), symbiosis as reciprocal exchange of services or resources, ion exchange across cell membranes (sodium-potassium pumps, antiporters), ligand-receptor binding as recognition-mediated molecular exchange. The biological cases are particularly clean: they exhibit the exchange pattern with no humans and no institutions, only co-evolved recognition and selection-enforced terms.

**Information systems**: Data interchange formats (JSON, XML, Protocol Buffers), API contracts, handshake protocols, identity federation flows (OAuth, SAML) where each side supplies and receives structured payloads under an agreed schema and the schema *is* the recognized terms.

**Social and ceremonial life**: Conversation as exchange of utterances under conversational maxims, gift-giving on occasions, favor-trading in friendship networks, academic citation as exchange of credit, peer review as exchange of evaluation labor.

clarity:
Naming exchange as a structural relation distinguishes it cleanly from the things it is routinely confused with. Practitioners often slide between "trade," "transaction," "market," "deal," and "exchange" as if they were synonyms; each in fact picks out a different element. Trade is the activity of repeated exchange; transaction is the discrete record; market is the institutional venue in which many exchanges are aggregated; deal is the negotiated set of terms; exchange is the underlying bilateral relation that all of these depend on. A clear vocabulary lets the analyst ask, of any interaction: is this an exchange at all (is there bilateral conditionality?), and if so, what are the parties, what are the conditional transferables, what are the recognized terms, what is the enforcement context, and what counts as completion?

This clarity is especially useful when reasoning across substrates. A biologist describing pollinator-plant mutualism and an economist describing gains-from-trade are talking about the same relation, but the disciplinary vocabularies obscure this. Naming the relation directly, in substrate-neutral terms, lets the structural insights flow both ways. The same clarity applies to debugging a stuck system: when an exchange fails, the failure mode is almost always traceable to one of the five roles — wrong parties, missing transferable, ambiguous terms, broken enforcement, undefined completion — and the diagnostic question becomes which role is unspecified or failing.

manages_complexity:
Reframing an opaque interaction in exchange language decomposes it into five concrete, interrogable roles. Instead of asking "what is going on here?" the analyst asks: who are the *parties*? what are the *transferables* on each side, and how are they conditional on each other? what are the *terms* (ratio, price, schema, contract, ritual)? what is the *recognition and enforcement context* (the institutional, normative, technical, or co-evolutionary frame that makes the terms binding)? and what is the *completion condition* (settlement, delivery, acknowledgement, mutual release)? Coase's (1937) analysis of the firm as a domain within which exchanges are coordinated by hierarchy rather than by price makes the role-decomposition methodologically explicit: the question of whether to internalize an exchange depends on the cost of specifying each role under each governance regime. <!-- FACT-D56-143 -->[^coase-1937]

Once those roles are named, hidden frictions, asymmetries, and dependencies become visible. *Transaction costs* — search, negotiation, verification, enforcement — are exactly the costs of specifying and operating each role, and they attach to the exchange process itself rather than to the transferables. Williamson's (1985) transaction-cost economics formalized this: the structure of an exchange determines its cost-of-coordination, and that cost determines which governance form (market, hybrid, hierarchy) is efficient. <!-- FACT-D56-144 -->[^williamson-1985] Hidden *asymmetries* (one side's transferable is harder to verify than the other's, one side bears more risk between commitment and completion) become problems with specific roles rather than diffuse complaints. Bromiley and Cummings (1995) document trust itself as a substitute enforcement frame that reduces transaction costs in asymmetric exchanges without formal contracting, locating the intervention point on whichever role the asymmetry sits on rather than treating the friction as undifferentiated. <!-- FACT-D56-150 -->[^bromiley-cummings-1995] Hidden *dependencies on the enforcement frame* become visible when the same trade across a border becomes a different exchange because the recognition context changed. Granovetter's (1985) embeddedness analysis sharpens this: real-world exchange relations are sustained by social ties as well as by formal market institutions, with the enforcement-context role filled jointly by trust, reputation, and price signals rather than by any single institutional form. <!-- FACT-D56-148 -->[^granovetter-1985]

The role-structure also makes exchanges *composable*. Chains and networks of exchanges — supply chains, market systems, trading networks, message-bus architectures, ecological webs — inherit the same logic at each link, so the analyst can apply the same five questions at any scale. Liquidity, for instance, is a property of a market that emerges from the existence of many counterparties willing to exchange on standard terms; the role-structure makes that emergence legible.

abstract_reasoning:
Exchange supports two characteristic, substrate-independent reasoning moves. First, the **gains-from-trade counterfactual**: if each party values what they receive more than what they give up under their own valuation, the exchange creates value without creating matter — a Pareto-improving move that follows from the role structure rather than from any particular substrate. The same counterfactual applies to a barter trade, an API call between cooperating services, a treaty between states, and a pollinator-plant interaction: in each case, both sides end up better off by their own lights, and the value created is a structural consequence of conditional bilateral transfer between differently endowed parties.

Second, **friction analysis**: any exchange is shadowed by costs of search, negotiation, verification, and enforcement that are *not* the transferables themselves but that consume resources to make the transfer happen at all. Akerlof's (1970) lemons-market analysis is the classic case: when verification of transferable quality is costly and asymmetric, the exchange relation can degrade or collapse even when gains from trade exist, because the friction on one role (verification of terms) makes the others unworkable. <!-- FACT-D56-145 -->[^akerlof-1970] Friction reasoning lets the analyst predict where an exchange will stall and which intervention (better signals, third-party verification, standardization, escrow) addresses which role. Ostrom's (1990) design principles for self-governed commons extend the same logic to the community scale, deriving the conditions under which repeated exchange among many parties over common-pool resources can be sustained without central authority by engineering the enforcement-context role through graduated sanctions, monitoring, and nested governance. <!-- FACT-D56-149 -->[^ostrom-1990]

A third, derived move is **chain composition**: because exchanges are composable, properties of a system of exchanges can be derived from properties of the individual exchanges plus the way they compose. Price formation in markets, equilibrium analysis, and network-effect reasoning are all instances of this move. Hayek's (1945) treatment of the price system as a decentralized information-aggregation mechanism is a chain-composition argument: each exchange transmits a local signal about valuations, and the system as a whole aggregates these into prices that coordinate production. <!-- FACT-D56-146 -->[^hayek-1945]

knowledge_transfer:
The five-role structure travels intact across substrates with no translation step required. A distributed-systems engineer reading about kula-ring gift exchange recognizes a handshake protocol with deferred settlement and reputation-based enforcement; an anthropologist reading about TCP recognizes ceremonial reciprocity with strict completion conditions and protocol-enforced terms; a biologist reading about gains-from-trade recognizes obligate mutualism, where each species' "currency" is something the other cannot synthesize and the gain-from-exchange explains the persistence of the relation across selective pressure. An ion-channel biophysicist studying antiporter molecules — which exchange one ion for another across a membrane, conditional on both moving — recognizes the same conditional bilateral structure that an exchange-rate trader uses in currency markets.

The transfer is structural rather than metaphorical because the cases are genuinely instances of the same relation: reciprocal transfer under recognized terms, with each side's move conditional on the other's. The biological and protocol cases are particularly load-bearing for the prime's claim to substrate independence: they exhibit the pattern with no humans, no money, no markets, and no contracts, ruling out the suspicion that exchange is an economics specialty dressed in general clothing. Money is one possible transferable; markets are one possible recognition context; contracts are one possible enforcement frame. None is constitutive.

formal_abstract:
**Pollinator-plant mutualism.** The *parties* are a bee and a flowering plant. The *transferables* are nectar (plant gives, bee receives) and pollination services (bee gives, plant receives); each is conditional on the other in that bees visit flowers that produce nectar and plants reward visitors that move pollen. The *terms* are encoded by physical structure and signal: flower shape, color, ultraviolet pattern, scent, and nectar-volume calibrate the bee's return rate and species-fidelity. The *enforcement context* is co-evolutionary, with deception (nectarless mimics, pollen-robbers) policed by selection rather than by contract. The *completion condition* is per-visit — once the bee drinks and departs carrying pollen, that episode is done, though the relation persists across visits and across generations. **Mapped back:** This is an exchange with no humans, no money, no markets, and no contracts, yet the five-role pattern is fully present and the gains-from-trade reasoning applies directly — both species end up better off by the lights of selection, which is why the mutualism persists.

**Ion exchange across a cell membrane.** A sodium-potassium ATPase pump moves three Na+ ions out of the cell and two K+ ions into the cell per ATP hydrolyzed. The *parties* are the cytoplasm and the extracellular space (or, more carefully, the binding sites on each face of the pump). The *transferables* are sodium ions (cytoplasm gives, extracellular receives) and potassium ions (extracellular gives, cytoplasm receives), conditional on each other in that the pump's conformational cycle only completes when both transfers occur. The *terms* are the 3:2 stoichiometry encoded in the protein structure. The *enforcement context* is the protein's allosteric mechanism: it physically cannot release one ion without committing to the conformational change that enables the other transfer. The *completion condition* is a full pump cycle. **Mapped back:** A biochemical pump is structurally an exchange relation. Naming it as such lets the same reasoning that applies to currency exchange (rate, capacity, what happens when one side's supply runs low) apply to ion gradients — and indeed cellular energetics is full of "exchange-rate" reasoning about ion gradients as currencies.

applied_industry:
**TCP three-way handshake.** Two processes establish a connection: client sends SYN, server replies SYN-ACK, client returns ACK. The *parties* are the client and server processes (more precisely, their TCP stacks). The *transferables* are connection-initiation commitments and sequence-number agreements: each side commits to a starting sequence number and acknowledges the other's, conditional on receiving the counter-commitment. The *terms* are the TCP specification: which flags mean what, which sequence numbers are valid, how long to wait. The *enforcement context* is the protocol stack and the operating system kernel implementing it. The *completion condition* is the final ACK, after which the connection is "established" and data exchange begins. **Mapped back:** The TCP handshake is a textbook example of structured reciprocal transfer under recognized terms. Treating it as an exchange lets the same friction analysis (what happens when one side's commitment is lost in transit, what the cost of verification is, what completion ambiguity looks like) apply that applies to a financial trade. Indeed the two-phase commit protocol used in distributed databases is explicitly modeled as an exchange with an atomicity guarantee.

**Cross-border supply-chain trade.** A European retailer purchases textiles from a manufacturer in Bangladesh. The *parties* are the retailer and the manufacturer; the *transferables* are payment (retailer gives, manufacturer receives) and goods (manufacturer gives, retailer receives), conditional on each other through a letter of credit. The *terms* are the contract: specifications, price, delivery dates, quality standards, Incoterms allocating risk. The *enforcement context* is a layered set of frames — the contract law of the chosen jurisdiction, the international banking system honoring the letter of credit, the customs regimes on each side, the carrier's bill of lading, industry standards for textile quality, and informal reputational mechanisms in the buyer-seller relationship. The *completion condition* is delivery, inspection, and final payment release. **Mapped back:** The supply-chain trade exhibits the full role-structure, and every famous failure mode (counterparty risk, quality verification, force-majeure disputes, FX exposure) is traceable to friction on a specific role. Naming the relation as an exchange lets practitioners use the same diagnostic toolkit across very different cases — an international goods trade, an API integration, and a diplomatic prisoner exchange share more structure than their domain vocabularies suggest.

title: Conditionality versus trust

body: Exchange requires that each party's move be conditional on the other's, yet conditional moves cannot be perfectly simultaneous in practice. Someone must commit first, exposing themselves to the risk that the counterparty defects. The whole institutional apparatus of escrow, letters of credit, two-phase commit, and ceremonial sequencing exists to manage this asymmetry, but it can never eliminate it: there is always a moment where the structure depends on enforcement holding. The tension is sharpest where enforcement is weakest — cross-border deals, novel protocols, first-time interactions — and slackest where enforcement is densest, but it is never absent.

title: Specifying terms reduces friction but raises specification cost

body: More precise terms (detailed contracts, formal schemas, ISO standards) reduce ambiguity, dispute, and verification cost at the moment of exchange, but they raise the cost of writing, agreeing, and updating the terms. Looser terms (handshake deals, informal conventions, trust-based exchange) are cheaper to set up but more expensive to operate when something goes wrong. There is no global optimum; the right balance depends on frequency, stakes, counterparty heterogeneity, and the rate at which the environment changes. Systems that optimize too far in either direction — over-specified to the point of brittleness, or under-specified to the point of constant dispute — fail in characteristic ways.

title: The same exchange can create value and extract it, and the structure does not distinguish them

body: Gains-from-trade reasoning shows that voluntary exchange creates value, but the same structural pattern operates in coerced or deceptive exchanges, in monopoly pricing, and in exchanges between parties of very unequal information or power. The five-role structure is silent on whether the exchange is fair, voluntary, or value-creating overall; those are properties of the *terms* and the *enforcement context*, not of the relation itself. Practitioners who assume that "exchange" is intrinsically benign import a normative claim the structure does not support.

title: Composability creates emergent properties that the local-exchange view misses

body: Chains and networks of exchanges generate properties — price formation, liquidity, contagion, market crashes, network effects — that are not visible from any single exchange. Reasoning about a system as a collection of independent bilateral exchanges can miss systemic risks; reasoning about it only at the aggregate level can miss the role-level frictions that determine whether the aggregate works. The tension is between the substrate-neutral local view (which travels well across domains) and the system-level view (which captures emergent dynamics but is more substrate-specific). Good analysis moves between them.

title: Substrate independence cuts both ways

body: The five-role structure travels across substrates intact, which is the prime's claim to power, but in each substrate, locally important features get encoded into specific roles in domain-specific ways, and analysts who carry assumptions from one substrate to another can mislead themselves. The biological "enforcement context" of co-evolution is not the same kind of thing as a legal enforcement context, even though both occupy the same role in the structure. A pollinator-plant mutualism is genuinely an exchange, but reasoning about it as if breach-of-contract remedies were available leads nowhere. The structural pattern is portable; the substrate-specific instantiation of each role is not.

title: Defining the completion condition is harder than it looks

body: When is an exchange done? Delivery, acceptance, payment clearing, warranty expiry, and post-sale obligations all extend the relation beyond the moment of transfer. In ongoing relationships (gift economies, supply contracts, ecological mutualisms), there may be no clean per-episode completion, only a steady-state of repeated transfers. The completion-condition role is what distinguishes a single exchange from an exchange relation, and many disputes are really arguments about whether a completion condition has been met. Systems that leave completion implicit accumulate hidden liabilities; systems that specify it rigidly may prematurely close exchanges that should remain open.

prose:
1. **Role enumeration and naming.** When an interaction is opaque or stalled, enumerate the five roles explicitly: who are the parties, what are the conditional transferables on each side, what are the recognized terms, what is the enforcement context, and what is the completion condition? Many interaction failures are role-specification failures — one of the five is unnamed, ambiguous, or wrongly assumed — and surfacing the gap is often most of the fix.

2. **Friction targeting on specific roles.** When an exchange is stalled or expensive, locate the friction on a specific role and address it there. Search friction calls for matching mechanisms (markets, directories, recommendation systems). Verification friction calls for signals, third-party certification, or escrow. Negotiation friction calls for standardization or default terms. Enforcement friction calls for institutional strengthening or alternative enforcement frames (reputation, repeat play, cryptographic commitment). Completion friction calls for explicit completion conditions and acknowledgement protocols.

3. **Recognition-context substitution.** When the natural enforcement frame is weak (cross-border deals, novel domains, first-time interactions), substitute or augment with a stronger frame: escrow accounts, letters of credit, cryptographic protocols, third-party intermediaries, reputation systems, or repeated-play structures that make defection costly over time. Ostrom's (1990) design principles for self-governed commons exhibit this archetype at the community scale, sustaining repeated exchange among many parties over common-pool resources without central authority. This is the structural insight behind a great deal of institutional design.

4. **Standardization of terms for composability.** When many exchanges need to compose (markets, supply chains, API ecosystems), standardize terms so that the same role-structure can be filled with interchangeable parts. Standardized contracts, ISO specifications, schema languages, and protocol stacks all do this. The cost is loss of bespoke fit; the gain is liquidity and network effects.

5. **Explicit completion-condition design.** Many disputes are arguments about whether an exchange is complete. Designing the completion condition explicitly — what counts as delivery, acceptance, payment clearing, warranty expiry, post-completion obligations — preempts a large class of disputes and clarifies risk allocation. This is especially important for novel exchange forms (digital goods, services with quality variation, exchanges with delayed feedback).

6. **Asymmetry-aware structuring.** When the parties are sharply unequal in information, power, or risk-bearing capacity, structure the exchange to surface and manage the asymmetry rather than to ignore it. Warranties, return policies, insurance, regulatory verification, and consumer-protection law are all asymmetry-management tools at the institutional level; signals, screening, and reputation mechanisms operate at the bilateral level. Bromiley and Cummings (1995) document trust itself as a substitute enforcement frame that reduces transaction costs in asymmetric exchanges without formal contracting, illustrating how the five-role decomposition makes the intervention point locatable: which role does the asymmetry sit on, and what intervention addresses that role?

notes:
The prime was surfaced in project-06 as the missing parent for the economic-exchange family. The existing `transaction` prime is the CS/DB ACID sense, so the morphology check found `transaction_costs` parentless: its natural parent was the economic sense of "transaction," which was a name collision. Two independent reasoning passes — Claude's R6 morphology check and ChatGPT Pro's R16 one-shot — surfaced the gap and proposed the same slug. The R17a edge `transaction_costs → exchange` is what closes the long-orphaned transaction_costs family and makes the name-collision fix structurally load-bearing rather than cosmetic.

**Load-bearing anti-drift anchor for v2 drafting:** the framing is "reciprocal transfer under recognized terms with each party's transfer conditional on the other's" — *not* money, *not* markets, *not* commodity trade. Losing this lets v2 narrow toward market trade and forfeit the prime's claim to substrate independence. The biological cases (pollinator-plant mutualism, ion exchange across membranes, ligand-receptor binding) and the protocol cases (TCP handshake, two-phase commit) keep v2 honest: they exhibit the pattern with no humans, no money, no markets, and no contracts.

The catalog candidate children — `transaction_costs`, `gains_from_trade`, `liquidity`, `price_mechanism`, `comparative_advantage` — are the immediate downstream concepts the prime parents. Each is a property of, or operation on, exchanges in particular institutional configurations (markets being the most common). The structural-furthest cases (biochemistry, ecology) extend the substrate-independence claim into domains where the candidate children do not have natural counterparts but the prime itself does. Possible second-parents in future reviews: `reciprocity` (exchange as its structured form) and, for the cooperative subset, `cooperation`. Acceptance also unblocks re-homing of the candidate children; until then, those edges remain proposed-pending.


Excitation-Inhibition Balance

type: prime

one_liner: Two opposed channels run concurrently and sum at every locus, so the system's output is the difference of two large quantities — high-gain, sharply tunable, and catastrophic to lose either side.

status: draft

core_idea:
Excitation-inhibition balance is the structural pattern in which a substrate's
normal operation depends on *the simultaneous, opposing action of two
distinguishable channels — one that activates and one that suppresses — whose
outputs are combined at every locus of decision*, so that the system neither runs
away into hyperactivity nor falls silent into quiescence. The distinctive
structural commitment is that *both channels are always active*: balance is
maintained dynamically, by co-modulation, not by switching one off. The result is
a system whose effective output is the *difference of two large, comparable
positive quantities*, which gives it high gain (small input shifts produce large
net effects), sharp tunability (the operating point moves without re-architecting),
and a sharp, asymmetric failure mode (loss of either channel breaks the substrate,
often catastrophically).

Four structural elements are jointly required for the pattern to count as E/I
balance rather than simple regulation or feedback. There are (1) *two
distinguishable channels with opposite signs* — excitatory and inhibitory,
activator and repressor, accelerator and brake — each present and active under
normal operation; (2) a *combining operation at every locus* whose output is
sensitive to the *difference* of the two channels; (3) *co-modulation rather than
alternation*, so both channels rise and fall together and balance is preserved by
parallel adjustment; and (4) a *sharp failure asymmetry* — loss of suppression
produces runaway, loss of activation produces silence, and the substrate cannot
easily compensate for either.

What distinguishes E/I balance from generic feedback is that it is *concurrent and
constitutive* rather than corrective. A feedback loop opposes or amplifies a
perturbation *after* it appears; in E/I balance the two channels are not responding
to each other but to the *same* upstream signals, and the substrate's operating
point is set by their joint magnitude and balance, not by one correcting the other.
The output sits at the difference of two large currents, which is precisely what
buys the high gain — and precisely what makes the system fragile to anything that
selectively removes one side.

structural_signature:
*the two opposite-signed channels, one activating and one suppressing* — *both concurrently active under normal operation* — *the difference-sensitive combining operation at every locus* — *the co-modulation rule that holds the ratio as input scales* — *the high gain from differencing two large quantities* — *the asymmetric failure under selective loss of either side*

A substrate exhibits E/I balance when each of the following holds:

- **Two opposed channels.** A distinguishable activating channel and suppressing channel — excitatory and inhibitory, activator and repressor, accelerator and brake — each present and active in normal operation.
- **Concurrent operation.** Both channels run simultaneously; balance is held dynamically by co-activation, not by switching one off.
- **A difference-sensitive combination.** At every locus of decision the two are combined into an output sensitive to their *difference*, so effective output is the difference of two large, comparable positive quantities.
- **A co-modulation rule.** As overall input scales, both channels rise and fall together, preserving the ratio; balance is maintained by parallel adjustment rather than alternation.
- **High gain and sharp tunability.** Differencing two large quantities yields large net swings from small input shifts and lets the operating point move without re-architecting.
- **Asymmetric failure.** Loss of suppression produces runaway; loss of activation produces silence; the substrate cannot easily compensate for either.

The components compose a regime that is concurrent and constitutive rather than corrective: unlike feedback, the two channels respond to the same upstream signals, not to each other, so the operating point is set by their joint magnitude — which is precisely what buys the gain and what makes the system fragile to anything that selectively removes one side.

what_it_is_not:
- **Not lateral inhibition.** `lateral_inhibition` is a *spatial-contrast* mechanism: active units suppress their neighbors to sharpen edges. E/I balance is a *temporal-concurrent magnitude* relation at every locus — opposed channels summed to a difference, tuned by ratio — not a neighbor-suppresses-neighbor topology.
- **Not balance in general.** `balance` is the broad state of opposing forces in equilibrium. E/I balance is the *specific* regime where two large, concurrently-active channels are differenced at every locus to yield a high-gain output — balance held by co-modulation, not a static equilibrium of small forces.
- **Not feedback.** `feedback` is *corrective*: a channel responds *after* a perturbation, watching the output. E/I balance is *constitutive*: both channels respond to the *same upstream input* concurrently, not to each other, so neither corrects the other.
- **Not homeostasis.** `homeostasis` holds a regulated variable near a setpoint by negative feedback. E/I balance has no setpoint being defended — the operating point is wherever the difference of two co-modulated channels lands, and it is meant to be high-gain and movable, not pinned.
- **Not damping.** `damping` removes energy to suppress oscillation. The inhibitory channel in E/I balance is not a dissipative brake on excitation's dynamics; it is an opposed drive summed concurrently, and the system's value is the high gain that differencing produces, not the suppression of motion.
- **Common misclassification.** Modeling a concurrently-balanced system as a feedback loop and expecting one side to "catch" the other's excess. If the inhibitory side tracks the *stimulus* rather than the excitatory *output*, it is concurrent balance — and any single-channel intervention will shift the operating point asymmetrically rather than being corrected away.

broad_use:
- **Neuroscience** (canonical): cortical activity at every scale shows close
  balance of glutamatergic excitation and GABAergic inhibition; loss of balance
  produces epilepsy (excitation runaway) or silence, and is implicated in autism,
  schizophrenia, and anxiety.<!-- FACT-D63-201 -->[^yizhar-etal-2011]
- **Gene regulation**: activator and repressor transcription factors bind in
  parallel at promoters, and net expression is their difference; loss of
  inhibition produces oncogenesis, loss of activation produces silencing.<!-- FACT-D63-202 -->[^ptashne-gann-2002]
- **Endocrine systems**: agonist–antagonist hormone pairs (insulin/glucagon,
  parasympathetic/sympathetic) operate in concurrent opposition, and loss of
  either side disrupts metabolism.<!-- FACT-D63-203 -->[^guyton-hall-2020]
- **Governance and constitutional design**: enabling powers and checking powers —
  legislatures and courts, executive and oversight, market and regulator — run as
  concurrent opposed channels; loss of checks yields authoritarian runaway, loss
  of enabling powers yields paralysis.<!-- FACT-D63-204 -->[^madison-1788]
- **Ecology**: predators (inhibitory on prey) and resource supply (excitatory on
  prey) act concurrently, and loss of top predators produces trophic cascades.<!-- FACT-D63-205 -->[^paine-1966]
- **Organisations and macro policy**: idea-generators and risk-stewards,
  accelerators and finance functions, fiscal expansion and monetary contraction
  operate as concurrent opposed channels, with loss of one side producing runaway
  initiatives or stagnation.<!-- FACT-D63-206 -->[^blanchard-2021]

clarity:
E/I balance separates *regulation* — a response after a disturbance — from
*concurrent balance* — continuous opposition at every locus. It also separates
*one-channel suppression* (turning excitation off) from *two-channel co-modulation*
(turning both up or down while preserving the ratio). These are different design
strategies with different failure modes, and conflating them produces analytic
errors: in neuroscience, the distinction explains why pharmacological
interventions targeting only excitation or only inhibition often have asymmetric,
opposite, or paradoxical effects, because they perturb the difference of two large
quantities rather than a single regulated variable.

The pattern also exposes a counter-intuitive geometry: *high inhibition can be a
feature, not a bug*. A system with high drive on both channels is high-gain,
high-precision, and high-cost; one with low drive on both is low-gain and
economical. Which is right depends on what the substrate needs — and naming E/I
balance makes that a deliberate design choice rather than a hidden default. The
clarifying force is to convert "the system is unstable" or "the system is sluggish"
into a structural diagnosis about the *ratio* of two concurrently-active channels
and the operating point their difference defines.

manages_complexity:
E/I balance compresses a potentially elaborate regulatory analysis to three
scalars — excitatory drive, inhibitory drive, and their net — plus one curve, the
failure mode versus the E/I ratio. Operators in any substrate can run the
diagnostic in the same order: identify the two channels, measure their relative
magnitudes, characterise the combining operation, identify the failure asymmetry
under loss of each channel, and identify the co-modulation rule that holds the
ratio. Because the units are dimensionless ratios, the answers are comparable
across substrates, which is what lets a synaptic analysis and a constitutional
analysis be read as instances of one structure.

It also folds many specific regulatory analyses — agonist–antagonist,
checks-and-balances, predator–prey, accelerator–brake, gain-and-damping — into one
structural family with a shared diagnostic vocabulary. Rather than maintaining a
separate theory for each, the analyst maintains one and instantiates it. The
complexity E/I balance manages is the complexity of *understanding concurrently
opposed regulation*, which it reduces to a small fixed set of measurements plus a
single characteristic failure curve, applicable wherever two opposed channels sum
at a locus.

abstract_reasoning:
E/I balance supports inference about *systems whose stability requires continuous
opposition rather than continuous correction*. The first characteristic move is
predicting *asymmetric distortion under single-channel intervention*: because the
operating point is the difference of two large quantities, acting on one channel
only shifts the point asymmetrically, which is a structural source of unintended
consequences — a stroke that kills inhibitory neurons, a political move that
removes a check, an antibiotic that removes a keystone competitor.

A second move is the *cost–precision inference*: systems built on concurrent
opposition are energetically more expensive than systems built on single-channel
correction, because both channels run continuously, but they respond faster and
more precisely — so the presence of E/I balance signals a substrate that has
"paid" for speed and precision. A third move is the *latent-vulnerability search*:
a system operating by E/I balance is specifically vulnerable to anything that
*selectively* suppresses one channel, so the analyst looks for single-channel
perturbations rather than global ones. The reasoner asks, at every turn: what are
the two opposed channels, are they co-modulated to hold a ratio, what is the
combining operation at each locus, and which selective loss produces runaway versus
which produces silence?

knowledge_transfer:
E/I balance transfers because its four structural commitments — two opposed
channels, concurrent operation, locus-by-locus combination, asymmetric failure —
survive substrate change cleanly, even though the canonical vocabulary leans
neural and pharmacological. The role mapping is consistent: the *two channels* map
to glutamate and GABA, to activator and repressor, to enabling and checking
powers, to predator and resource, to accelerator and brake; the *combining
operation* maps to synaptic summation, to net transcription, to net policy effect;
the *co-modulation rule* maps to whatever holds the ratio as overall input scales;
and the *failure asymmetry* maps identically to seizure-versus-coma,
oncogenesis-versus-silencing, runaway-versus-paralysis.<!-- FACT-D63-207 -->[^tatti-etal-2017]

The transfers are documented to recur independently across literatures, which is
itself evidence the structure is real rather than borrowed. The neuroscience
prediction that loss of inhibition produces hyper-active runaway transfers
structurally from cortex to polities — "constitutional epilepsy" is the same shape
as a seizure, runaway executive power without any change in the enabling powers
themselves.<!-- FACT-D63-208 -->[^madison-1788] The endocrine prediction that agonist–antagonist co-modulation
preserves the operating point under varying load transfers to growth–finance
pairings in organisations. The ecological trophic-cascade prediction transfers to
market–regulator pairings: removing a "predator" regulator does not merely leave
its prey unchanged but cascades through dependent populations. And the synaptic
pharmacology warning — that interventions targeting one channel produce predictable
distortions of operating point, not just changes in magnitude — transfers to policy
design wherever a single lever is pulled on a concurrently-balanced system. The
unifying transfer move is consistent: identify the two concurrently-active opposed
channels, characterise the locus combination and the co-modulation rule, and
predict the asymmetric runaway-or-silence failure that follows from selectively
removing one side. The standing caveat, reflected in the prime's mixed-structural
grading, is that the name strongly evokes neuroscience; the substrate-neutral core
is the high-gain opposed-channel sum, and a rename may eventually be warranted to
let that core travel without dragging the neural frame.

formal_abstract:
Cortical excitation-inhibition balance is the canonical case and instantiates every role of the prime as a measurable circuit property. The two opposed channels are glutamatergic excitation (pyramidal cells driving their targets toward firing) and GABAergic inhibition (interneurons hyperpolarizing the same targets), each present and active at every moment of normal cortical operation. The concurrency commitment is experimentally confirmed: recordings show that excitatory and inhibitory conductances onto a neuron rise and fall *together*, tracking the same upstream stimulus rather than one switching off, so the pattern is constitutive, not corrective.<!-- FACT-D63-209 -->[^wehr-zador-2003] The difference-sensitive combining operation is synaptic summation at the membrane: the neuron's net drive is excitatory current minus inhibitory current, a difference of two large, comparable quantities, which is exactly what gives cortex its high gain — a small shift in the balance produces a large change in firing rate — and its sharp temporal precision, since inhibition arriving milliseconds after excitation narrows the window in which the cell can fire. The co-modulation rule holds the E/I ratio roughly constant as overall input scales, which is why cortex stays responsive across orders of magnitude of input intensity without re-architecting. The asymmetric failure mode is the prime's clinical punchline made literal: selectively removing inhibition (blocking GABA receptors, or losing interneurons) produces runaway recurrent excitation — an epileptic seizure — while selectively removing excitation produces silence; the substrate cannot compensate for either, and the two failures are qualitatively opposite.<!-- FACT-D63-210 -->[^yizhar-etal-2011] The prime's reasoning about single-channel intervention is directly actionable: a drug that targets only excitation or only inhibition perturbs the *difference* of two large quantities, which is why such agents so often have asymmetric, paradoxical, or dose-sensitive effects, and why the rational design target is the ratio, not either channel alone.

**Mapped back:** Cortical E/I balance is the prime in its founding form — glutamate and GABA as the two concurrently-active opposed channels, membrane summation as the difference-sensitive combination, a held E/I ratio as the co-modulation rule, and seizure-versus-silence as the asymmetric failure — confirming that high gain and fragility both come from differencing two large currents.

applied_industry:
Two domains far from neuroscience — constitutional governance and macroeconomic policy — instantiate the same high-gain opposed-channel structure (with the prime's caveat that the neural vocabulary is translated, not native). In constitutional design, the two opposed channels are enabling powers (an executive and legislature that can act, build, spend) and checking powers (courts, oversight bodies, a free press that can block and constrain), both concurrently active in a functioning polity. The difference-sensitive combination is the net governing capacity that emerges at each decision locus — a policy passes only as the enabling drive net of the checking drive. The prime's asymmetric failure is the sharp diagnostic: selectively removing the checks while leaving enabling powers untouched produces *runaway* — authoritarian concentration, the "constitutional epilepsy" the prime names — while selectively hollowing out enabling powers produces *paralysis* and gridlock, and a polity cannot easily compensate for either.<!-- FACT-D63-211 -->[^madison-1788] The co-modulation insight matters for reform: scaling up state capacity safely requires scaling checks in parallel to hold the ratio, not merely adding power. Macroeconomic stabilization maps cleanly: the two opposed channels are fiscal/monetary *expansion* (the accelerator — rate cuts, stimulus) and *contraction* (the brake — rate hikes, tightening), run concurrently by interacting authorities, and the economy's operating point is set by their net.<!-- FACT-D63-212 -->[^blanchard-2021] The prime's single-channel warning is the practical core of policy debate: pulling only the expansion lever on a concurrently-balanced system shifts the operating point asymmetrically (inflation runaway) rather than simply adding "more growth," and pulling only the brake risks tipping into recessionary silence. In both domains the prime's intervention discipline is identical: identify the two concurrently-active channels, characterize how they combine at each locus, watch the *ratio* rather than either magnitude, and anticipate that any selective single-channel move will distort the operating point toward runaway or paralysis.

**Mapped back:** Constitutional checks-and-balances and fiscal-monetary stabilization both instantiate two concurrently-active opposed channels combined into a net at each locus, with the prime's asymmetric runaway-versus-paralysis failure under selective single-channel loss, so the diagnostic — track the ratio, beware single-channel intervention — transfers from cortex to governance and macro policy, with the standing caveat that the neural frame travels by translation.


Exemplar Retrieval

one_liner: Answering by reaching for the closest stored case and reusing its response, rather than applying an abstracted rule — the history itself is the model.

origin_domain: psychology

core_idea:
An exemplar-retrieval system answers "what is this and what should I do?"
by reaching for the *closest specific stored case* rather than by applying
an abstracted rule. The new situation is classified by its similarity to
remembered particulars, and the action chosen is whatever was done in that
remembered case, modulated by how confident the match is. The system never
extracts a clean rule from its history — the history itself is the model.

The distinction that makes this a prime is the contrast with *rule-based*
or *prototype-based* systems, which compress the same training history into
an abstraction — a centroid, a schema, a statute — and classify by checking
the new case against that abstraction. The same domain often admits both
architectures, and the choice between them is a substrate-independent
design decision with predictable consequences for transparency, edge-case
handling, brittleness under distribution shift, and how the system explains
itself. The load-bearing components are a *new case* requiring
classification, a *repository* of stored cases with associated responses, a
*similarity metric* over the case space, a *retrieval step* returning the
nearest case or cases, and an *action* chosen by reusing or interpolating
the retrieved response, with the similarity score itself signalling match
quality. There is no abstracted rule between case base and response, which
is precisely what gives the architecture its distinctive failure profile.

structural_signature:
*the new case requiring classification* — *the repository of stored cases with associated responses* — *the similarity metric over the case space* — *the retrieval step returning the nearest case(s)* — *the response reused or interpolated from the retrieved case* — *the absence of any abstracted rule between case base and response* — *the similarity score as match-quality signal*

A configuration exhibits exemplar retrieval when each of the following holds:

- **A new case.** A fresh situation arrives needing classification or a chosen
  action.
- **A case repository.** A store holds specific prior cases, each with its
  associated response — the history itself, not a compressed abstraction of it.
- **A similarity metric.** A measure of nearness over the case space lets the
  new case be compared against stored ones; the choice of metric is the most
  consequential design decision.
- **A retrieval step.** The nearest case or cases are returned by similarity,
  rather than the new case being checked against a centroid, schema, or statute.
- **A reused response.** The action is whatever was done in the retrieved
  case(s), copied or interpolated, modulated by the match confidence.
- **No intervening rule.** Critically, there is no abstracted rule between case
  base and response — this absence is what gives the architecture its
  distinctive failure profile, and what contrasts it with rule/prototype
  systems.
- **A match-quality signal.** The similarity score itself reports whether a good
  match exists, yielding "unconfident-and-honest" behaviour on novel inputs
  where prototype systems extrapolate confident-but-wrong.

Composed, these push knowledge into the corpus rather than into a rule —
relocating maintenance to corpus curation, making versioning, provenance, and
bias first-class, and reducing the design question to two decisions: what cases
to hold and what metric to compare them by. It is the *use* of associative
memory as a categorisation architecture, distinct from analogy (which abstracts
roles across domains) and from generic search (the retrieved item becomes the
answer template).

what_it_is_not:
- **Not `search_and_retrieval` in general.** Generic search returns a matching
  *item*; exemplar retrieval makes the retrieved case an *answer template* — a
  classification or action is reused from it — so the retrieval is the
  reasoning, not a lookup.
- **Not `analogy`.** Analogy abstracts *roles* and transfers structure across
  domains; exemplar retrieval matches a new instance to a stored one *in the
  same space* and copies the response — no role abstraction.
- **Not a rule/prototype system.** Rule and prototype systems *compress* the
  history into an abstraction (centroid, schema, statute); exemplar retrieval
  keeps the history itself with *no intervening rule* — the defining contrast.
- **Not `associative_memory` the mechanism.** Associative memory is the
  underlying recall mechanism; exemplar retrieval is its *use as a
  categorisation architecture*, with a similarity metric and reused response.
- **Not `comparison` or `comparative_method`.** Those weigh cases against a
  criterion or systematically contrast them; exemplar retrieval returns the
  *nearest* case and reuses its answer, not a structured contrast.
- **Not `recursion`.** Recursion is self-referential decomposition; exemplar
  retrieval is a flat nearest-case lookup with no self-call — embedding
  proximity is incidental.
- **Not `provenance`.** Provenance traces an item's origin; in exemplar
  retrieval corpus provenance is a *first-class concern* (the corpus is the
  model) but the prime is the architecture, not the origin-tracing.
- **Common misclassification.** Keeping an exemplar architecture where the
  domain needs uniform, auditable *rules* (sentencing, eligibility), so
  outcomes vary by which case happened to be retrieved.

broad_use:
In cognitive psychology, the origin, human categorisation often fits
exemplar storage better than prototype abstraction: traces of specific
encounters do classification work without ever consolidating into a rule.<!-- FACT-D63-226 -->[^medin-schaffer-1978]
In common law a judge reasoning by precedent locates the most similar prior
decision and reasons by analogy from its facts — the doctrine is *stare
decisis*, the cognitive operation is exemplar retrieval — while civil-code
systems classify from a statute, answering the same legal question with the
opposite architecture and different transparency-flexibility trade-offs.<!-- FACT-D63-227 -->[^llewellyn-1960] In
clinical medicine expert diagnosticians often pattern-match a presenting
case against remembered patients rather than against published criteria,
falling back to differential-diagnosis trees only at the boundary.<!-- FACT-D63-228 -->[^groen-patel-1985] In
machine learning k-nearest-neighbours, kernel methods, and
retrieval-augmented generation are exemplar systems, while logistic
regression, decision trees, and parametric classifiers are prototype
systems; vector-database retrieval feeding a model is the most visible
recent return to exemplar architecture at scale.<!-- FACT-D63-229 -->[^cover-hart-1967] In management,
case-based decisions and case-method teaching retrieve specific prior
situations rather than apply abstract rules.<!-- FACT-D63-230 -->[^klein-1998] And in expert craft, masters
store vast libraries of positions, samples, or images and retrieve the most
similar one — chess, wine tasting, fingerprint matching, radiology — rather
than reasoning from rules.<!-- FACT-D63-231 -->[^chase-simon-1973]

clarity:
Exemplar retrieval as a prime separates two architectures that look the
same from outside — both take an input, produce a classification, and act —
but reason and fail differently. Once a designer or analyst sees the
distinction, "the system is just memorising" reframes as "the system is
exemplar-based, which has these specific trade-offs," and "why can't the
expert explain her rule?" reframes as "she has no rule; she has cases." The
clarity move is to name the architecture so the right interventions become
available, and to distinguish it from its neighbours: it is the *use* of an
underlying associative-memory mechanism as a categorisation architecture,
not the mechanism itself; it matches a new instance to a stored instance
and copies the response, where analogy abstracts roles and transfers
structure across domains; and it is sharper than generic search and
retrieval because the retrieved item becomes the *answer template* for a
new case. The prime is most useful in contrastive mode — paired with the
rule/prototype architecture it becomes a sharp design lever rather than a
re-description of memory.

manages_complexity:
Exemplar systems push complexity into the corpus rather than the rule. The
active machinery is small — a similarity metric and a retrieval step — and
the knowledge sits in the case base. This relocates the maintenance
question: instead of editing a rule, you curate the corpus, and the same
relocation appears in legal databases, clinical case repositories,
embedding stores, and expert memory. Versioning, provenance, and bias of
the corpus become first-class concerns precisely because the corpus *is*
the model. By compressing the design question to two decisions — what cases
to hold and what metric to compare them by — the pattern lets an analyst
reason about an entire decision system's behaviour without enumerating any
rules, and it makes the otherwise invisible trade-off between architectures
explicit and choosable.

abstract_reasoning:
Exemplar retrieval makes several second-order properties legible.
*Edge-case behaviour*: prototype systems extrapolate, sometimes badly, into
regions the centroid covers but no case occupied, while exemplar systems
return the nearest stored case with a similarity score that itself signals
"no good match" — the contrast of confident-but-wrong versus
unconfident-and-honest is architectural, not a bug. *Adaptation*: adding a
case instantly changes an exemplar system's behaviour at that point in
similarity space, while updating a rule requires re-derivation, so exemplar
systems respond quickly to shifts but suffer when the case base drifts.
*Explanation*: an exemplar system explains by pointing ("this is most like
that") and a rule system by deriving ("the rule says…"), two different
kinds of explanation, neither fully substituting for the other. *Bias*:
exemplar systems inherit the distribution of their corpus, so
underrepresented cases get worse matches and silently lower performance.
These are structural consequences of having no rule between case base and
response, true wherever the architecture is instantiated.

knowledge_transfer:
Because the architectural contrast is substrate-independent, diagnoses and
interventions move cleanly across domains. If an expert performs well but
cannot articulate her rule, the transferable move is not to press for the
rule but to surface her exemplars — the transmissible knowledge is the case
set, not a derivation, and the same holds for a master clinician or a
seasoned operator. If a learning system fails on a new distribution, the
diagnostic is to ask whether it is exemplar (a stale corpus) or rule (a
wrong rule), because the remediation differs sharply: corpus refresh versus
rule re-derivation. If a legal or policy domain wants flexibility under
novelty, an exemplar (common-law) architecture serves; if it wants
uniformity and predictability, a rule (statute) architecture serves — and
the choice has direct downstream consequences for how the system handles
cases it has never seen, a transfer that runs identically between
jurisprudence and machine learning. A recurring transferable hazard is that
a similarity metric mismatched to the operative semantics silently corrupts
an exemplar system, making metric choice the most consequential design
decision in every substrate. And the mature pattern everywhere is hybrid —
rules for the well-mapped centre, exemplars at the periphery, visible in
medicine, jurisprudence, and expert machine-learning systems — so the prime
also transfers the recognition that the hybrid is a *deliberate allocation*
between two architectures rather than an accident. The renewed prominence
of retrieval-augmented generation makes this transfer especially live: many
"fix the hallucination" debates are at bottom architecture debates between
rule (fine-tune the model) and exemplar (retrieve and ground), and a
practitioner who holds the contrast arrives at them already knowing which
failure modes follow each choice.

formal_abstract:
The k-nearest-neighbours classifier is the prime's cleanest formal instance,
because it has *no* model parameters at all — the training set itself is the
model.<!-- FACT-D63-232 -->[^cover-hart-1967] A *new case* arrives as a feature vector $x$. The *case repository* is the
full set of stored training examples $\{(x_i, y_i)\}$, each a specific case with
its label. The *similarity metric* is an explicit distance function — Euclidean,
cosine, or a learned metric — over the feature space; the prime's claim that
metric choice is the most consequential decision is literal here, since the same
case base under a different distance gives different answers.<!-- FACT-D63-233 -->[^cover-hart-1967] The *retrieval
step* returns the $k$ nearest stored cases to $x$; the *reused response* is their
majority (or distance-weighted) label, *copied or interpolated* from the
retrieved neighbours with no abstracted rule in between. The prime's *match-
quality signal* is the neighbour distances themselves: when the nearest stored
cases are all far away, the classifier is honestly in a sparse region, in
contrast to a *prototype* model like logistic regression, which fits a global
decision boundary and will extrapolate a *confident* label into a region no
training case ever occupied — the architectural "confident-but-wrong versus
unconfident-and-honest" contrast the prime names.<!-- FACT-D63-234 -->[^hastie-etal-2009] Adding one labelled example
*instantly* changes kNN's behaviour at that point in similarity space, with no
re-derivation, the prime's fast-adaptation property in exact form.<!-- FACT-D63-235 -->[^aha-etal-1991]

**Mapped back:** The query vector is the new case, the stored training set is the
repository, the distance function is the similarity metric, the $k$ neighbours
are the retrieval, their majority label is the reused response, and the absence
of fitted parameters is the prime's "no intervening rule."

applied_industry:
Common-law adjudication by precedent instantiates the same prime in a legal
substrate, with the contrast against civil-code systems making the architecture
visible. A *new case* is a dispute before the court. The *case repository* is the
body of prior reported decisions; the *similarity metric* is the judge's
assessment of which precedents are "on point" — which share the materially
relevant facts. The *retrieval step* is locating the most analogous prior
decision, and the *reused response* is reasoning by analogy from its holding to
the present facts (the doctrine of *stare decisis*),<!-- FACT-D63-236 -->[^llewellyn-1960] *with no abstracted statute
in between* — which is exactly what distinguishes common law from a civil-code
system that classifies the same dispute by checking it against a written code (a
*prototype/rule* architecture). The prime's trade-offs map directly onto the
jurisprudential ones: the exemplar (common-law) architecture handles genuine
novelty gracefully — the *match-quality signal* appears as a "case of first
impression" where no close precedent exists and the court reasons openly — while
the rule (statute) architecture delivers uniformity and predictability but can
extrapolate a code provision awkwardly into a situation its drafters never
imagined.<!-- FACT-D63-237 -->[^llewellyn-1960] The prime also names the corpus hazards as first-class: precedent
*bias* (an unrepresentative line of cases) and *provenance* (which jurisdiction's
decisions bind) are concerns precisely because the case base *is* the model. A
structurally identical applied instance is retrieval-augmented generation, where
a language model grounds its answer in retrieved documents rather than in
fine-tuned weights.

**Mapped back:** The dispute is the new case, reported decisions are the
repository, "on-point-ness" is the similarity metric, the analogous precedent is
the retrieval, reasoning from its holding is the reused response, and *stare
decisis* without a governing statute is the prime's no-intervening-rule
signature.


Expectancy-Mediated Outcome

one_liner: An explicit expectation or learned predictive state about an outcome becomes a causal input to that outcome, with the response channel and coupling sign determining whether realization moves toward or away from what was expected.

core_idea:
An expectancy-mediated outcome occurs when an explicit expectation or learned predictive state about an outcome becomes a causal input to that same outcome. The state may be a consciously held proposition, an instructed belief, a socially transmitted forecast, or an anticipatory association learned through prior pairing. What matters is target matching: the prediction concerns the variable that is later realized, and reality would have differed had the predictive state not entered the system.

A response channel converts prediction into consequence. It may recruit internal physiology, redirect perception or attention, alter the holder's behavior, change how another person treats a target, or aggregate many agents' actions. The coupling sign is independent of channel. Positive coupling moves realization toward the expectation; negative coupling moves it away; partial cases amplify or attenuate without fully confirming or defeating the proposition. Feedback is required only when outcome re-enters later expectation. A one-shot expectancy-to-physiology response belongs even without a closed loop.

structural_signature:
- **The predictive state** — an explicit belief, forecast, instruction, or learned anticipation about an outcome.
- **The target match** — the state refers to the same outcome variable later realized.
- **The response channel** — physiological, perceptual, attentional, behavioral, interpersonal, or collective action.
- **The counterfactual contribution** — the realized outcome changes because the predictive state was present.
- **The coupling sign** — positive, negative, amplifying, or attenuating.
- **The realization** — the outcome after the predictive state and response channel have entered its causal history.
- **The optional return path** — feedback exists only if realization updates the next predictive state.

what_it_is_not:
The prime is not ordinary prediction. A weather forecast can be perfectly accurate while causally inert with respect to the weather. It is not mere reporting or retrospective interpretation unless the report itself changes the measured or realized outcome. It does not require conscious endorsement: conditioned therapeutic cues can recruit an effect even when a person explicitly knows an intervention is inert.

The prime is also broader than self-fulfilling prophecy. Positive behavioral validation is one species. Direct physiological response, interpersonal expectancy, and negative collective response are equally valid channels or signs.

broad_use:
- **Medicine:** placebo and nocebo expectations recruit endogenous regulatory pathways and change experienced or measured outcomes.
- **Experimental research:** participants' beliefs about assignment alter behavior, reporting, or physiology.
- **Education and organizations:** evaluator expectations change attention, opportunity, feedback, and target performance.
- **Finance:** beliefs about withdrawals, prices, or solvency alter behavior and can help realize the anticipated state.
- **Public forecasting:** traffic, epidemic, shortage, and resource-use forecasts can trigger responses that reduce or magnify the forecast variable.
- **Identity and performance:** concern about an expected stereotype-consistent outcome redirects working memory and changes performance.

clarity: The prime separates two questions often collapsed: Was the expectation accurate? Did the expectation help cause what happened? A forecast can be false because it successfully prompted prevention, or true because it mobilized behavior that made it true. Evaluation therefore requires tracing the response channel, not merely comparing prediction with realization.

manages_complexity: Many named effects reduce to four variables: predictive state, target outcome, response channel, and coupling sign. This makes placebo, Pygmalion effects, stereotype threat, confidence spirals, bank-run beliefs, traffic forecasts, and epidemic warnings comparable without declaring them identical. Their differentia lie in who holds the state, how the response travels, and which sign it has.

abstract_reasoning:
The abstraction endogenizes representation. A prediction that enters the system is no longer an outside description; it becomes part of the system's causal state. This changes calibration logic. A warning can be useful precisely when its predicted outcome fails to occur, while an apparently accurate forecast may owe its accuracy to the actions it induced.

The prime also prevents universalizing feedback. The expectation-to-response-to-outcome path can occur once. Only when outcome updates the expectation or the next action does the structure close into a feedback loop. This distinction preserves placebo-like one-shot cases while allowing self-confirming and self-defeating dynamics as recursive species.

knowledge_transfer: The portable diagnostic is: identify the predictive state; verify that it targets the realized variable; trace a response channel; establish that the outcome counterfactually changed; determine sign; then ask whether a return path closes the loop. This sequence transfers from clinical design to markets, organizations, public warnings, and interactive forecasting.

notes: Created from `workspace/mixed_dag_2026/missing_node_adjudications/expectancy_mediated_outcome.yaml`. Identity and hierarchy are adjudicated; final voice and citations remain editorial tasks.


Expectation Violation

one_liner: An active prediction or schema specifies what should occur; an incompatible realization crosses a mismatch threshold and triggers surprise, reorientation, or repair, making the violated expectation diagnostically visible.

core_idea:
Expectation violation occurs when an active prediction, script, schema, or convention specifies what should happen and a realized event is incompatible enough to trigger surprise, reorientation, processing cost, or repair. The response makes the previously tacit expectation diagnostically visible.

The canonical identity is narrower than the phrase’s everyday use. There is an active anticipatory model, a comparable realization, a mismatch above a salience threshold, and an operational response. Novelty alone is insufficient; something expected must be breached.

structural_signature:
- An active prediction, script, schema, convention, or learned regularity.
- A realized event or feature comparable with what the active model anticipated.
- A mismatch large or salient enough to register rather than be assimilated as noise.
- A violation response such as surprise, processing difficulty, attention shift, model revision, or repair.

what_it_is_not:
Baseline deviation needs only departure from a reference. Prediction error is a model-generated residual used for updating, routing, or diagnosis and need not be experientially surprising. Reward prediction error adds value learning. Tension-and-release adds deliberate buildup and resolution.

- A static observation-reference departure without an active prediction belongs to baseline_deviation.
- A signed model residual used operationally for update or routing belongs to the staged prediction_error prime.
- A reward/value-specific teaching signal belongs to reward_prediction_error.
- Deliberate instability that must be sustained and resolved belongs to tension_and_release.
- Mere novelty without a breached prediction does not qualify.

broad_use:
Music, narrative, user interfaces, social scripts, anomaly detection, and perception preserve prediction–breach–response roles. Human surprise is one realization, not the entire structure.

A shared label or downstream consequence is insufficient; the load-bearing roles must survive.

clarity: Expectation Violation separates a specific relation from neighboring ideas that can produce similar observations. Baseline deviation needs only departure from a reference. Prediction error is a model-generated residual used for updating, routing, or diagnosis and need not be experientially surprising. Reward prediction error adds value learning. Tension-and-release adds deliberate buildup and resolution.

manages_complexity: The abstraction compresses recurring cases into one inspectable model. An analyst can track its roles, compare mechanisms, and locate which missing commitment invalidates an analogy.

abstract_reasoning: Identify the candidate roles, test their defining relation, then challenge the nearest boundary case. A rare event that no model assigned a contrary expectation is novel but not an expectation violation.

knowledge_transfer: Music, narrative, user interfaces, social scripts, anomaly detection, and perception preserve prediction–breach–response roles. Human surprise is one realization, not the entire structure. Transfer is warranted only when the same causal, formal, or relational work survives.

notes: _(Canonical first draft from the adjudicated missing-node gate. Queued for Claude house-style re-authoring and independent citation review; no citations have been fabricated.)_