Re: Social Policy Bonds -- Attn: Robin Hanson

Date: Tue Jan 23 2001 - 11:21:32 MST said:
> I assume that [do-gooders] do sometimes change their non-bond-market
> behavior in ways that helps the social policy, but this doesn't help
> them unless they also have private info about whether they will help,
> and buy more bonds when they privately know they will help.

I'm still not getting it, Robin. My supposition was that some do-gooders
would decide whether or not to help depending on whether they were able to
buy enough bonds to repay the effort. This doesn't sound like your "unless
they also have private info about whether they will help", which seems much
more passive. You seem to be drawing causality the other direction: if
they know they will help address the policy issue, then they buy more
bonds. In that case, you're right that they can't make money unless they
know more than other experts about how many people will work on the issue.

My interpretation of the value of the bonds has the causality in the other
direction for at least some people. They invest in a bond issue in which
they could help address the issue. (They might actually invest widely in
these bonds so there are more issues that they would conditionally effect.)
 When they amass a sufficient stake in one issue, they decide to move on
actually doing the work. If they can't get enough, they move their
attention elsewhere.

This is also supposed to be one of the strong points of Idea Futures. IF
provides incentive for effort to be placed in areas where someone has
invested. Some polymaths can decide where to spend their investigation
time based on which market they have collected sufficient coupons to make a
sufficient return on.


             C. J. Cherryh, "Invader", on why we visit very old buildings:
                         "A sense of age, of profound truths.  Respect for 
Chris Hibbert        something hands made, that's stood through storms and   wars and time.  It persuades us that things we do may
                                                         last and matter."

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