From: Wei Dai (weidai@weidai.com)
Date: Tue Mar 11 2003 - 19:38:45 MST
On Mon, Mar 10, 2003 at 11:49:07PM -0800, Hal Finney wrote:
> Maybe you could use a Groves and Ledyard mechanism to set the value of the
> total pool of money to be disbursed to information creators, and then a
> simpler voting system like this could control how the money is divided.
> People would have an incentive in the voting to be reasonably accurate
> since they would want more money to go to the creators of information
> that they value. And they would only need to vote for the specific
> information goods they had found valuable in the recent past, so with
> some computer aid it might be a practical system.
Unlike my proposal, this one does not depend on the public good being
information. It could actually be applied to funding any kind of public
good. For example, suppose the U.S. government turned all of its federal,
state, and local agencies into private charities, and just had a law
saying that a certain percentage of income must be donated to approved
charities. Each person decides on his own how to allocate his money among
these charities. What would happen? Local governments would be overfunded
compared to state and federal governments, because each person gets a
larger personal benefit from giving to their local government even if the
social benefit is smaller.
So a similar thing would happen if you apply this to information goods.
Information with few users would be overfunded compared to information
with many users. In the limit, each person gives all of the money under
his control to himself for producing information that only he himself
uses.
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