[extropy-chat] Externalities

[Chris Hibbert]

> Seems like a lot of the problems we face could be solved if there
> were some reasonable scheme to compensate people for negative
> externalities.

There has been a fair amount of discussion in the blogs I read about an 
idea called Dominant Assurance Contracts.

This is based on an old idea called Assurance Contracts, in which 
individuals sign up to fund a public good.  If enough people join in all 
the pledges are collected; otherwise, everyone gets their money back. 
This idea has actually been implemented at fundable.org.  Alex Tabarrok 
(who writes for the blog Marginal Revolution at marginalrevolution.com) 
extended this several years ago.  In his proposed Dominant Assurance 
Contracts

      if the group goal is not met then everyone who offered
      to contribute is given their money back plus a bonus.
      It turns out that it then becomes a dominant strategy to
      contribute and the public good is always provided!

The most recent blogging on the subject is by Mike Linksvayer: 
http://gondwanaland.com/mlog/2005/07/08/

Kragen Sitaker has been pushing the idea, and wrote up a long 
description on his "thinking out loud" list:
http://lists.canonical.org/pipermail/kragen-tol/2005-June/000783.html

They've also been written up at wikipedia: 
http://en.wikipedia.org/wiki/Assurance_contracts

I put a copy of this message on my new blog so it'll get linked into 
that discussion.

Chris
-- 
It is easy to turn an aquarium into fish soup, but not so
easy to turn fish soup back into an aquarium.
-- Lech Walesa on reverting to a market economy.

Chris Hibbert
hibbert at mydruthers.com
Blog:   http://pancrit.org
http://mydruthers.com