A Smarter Kickstarter

I speak with Paul Matzko at the Building Tomorrow podcast about public goods, Kickstarter and my mechanism for producing public goods privately, the dominant assurance contract.

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When I was young, movies were expected to improve the audience's morals, particularly the youngesters'. After all, they are our nation's future and their minds are moldable and must be shaped into the right disposition. Good values, such as patriotism, courage and resourcefulness used to be promoted by schools and companies. We used to have movies such as From Here to Eternity, The Story of Louis Pasteur and The Longest Day to remind us the difference between right and wrong. Nowadays, however, Hollywood (and ultimately, America's youth's minds) are under the control of unscrupulous persons, who promote the interests of a hostile power, to wit, Red China. The seduction of the innocent now happen in every movie theatre and every living room of this cou try of ours. I think we can agree this fact bodes ill for America, its inhabitants and their liberty. Please call your representative and make him know that it can't go on and that, if this state of affairs lasts, he will be out of a job we, the people, will vote him out. Thank you very much.

https://www.japantimes.co.jp/news/2019/07/20/asia-pacific/top-gun-sequel-appears-remove-japanese-taiwanese-flags/

https://www.theguardian.com/world/2019/aug/16/disneys-mulan-star-sparks-call-for-boycott-with-hong-kong-stance

https://www.telegraph.co.uk/culture/film/film-news/9697307/Red-Dawn-film-replaces-Chinese-villains-with-North-Koreans.html

https://www.independent.co.uk/arts-entertainment/films/news/richard-gere-big-hollywood-movies-china-tibet-buddhist-dalia-lama-chinese-audience-blockbusters-a7693256.html

To be honest, I am concerned about this too. I wonder how wull be the America my children will grow in. A bigger Hong Kong?

Only if Hong Kong had a strong fascist leader like Fuhrer Bolsanaro will they no longer live under totalitarianism.

What's Going down i am new to this, I stumbled upon this I have found It positively useful and it
has aided me ouut loads. I'm hoping to contribute & aid different
customers like its helped me. Good job.

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It is scary to think that our childreh can live under Chinese totalitarianism.

I want all the world's children to live under totalitarianism. Just like Brazil!

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I was not aware of the seriousness of the situation. Thanks for having opened my eyes. It ia shoxking to think money ia being used to undermine America's liberties and security. Congress has a moral duty to investigate Disney. Is it possinle that it is just a front company for the CCP (Chinese Communisty Party)? It would explain so much!!

I won't help to fund the takeover of our country. I will never watch another Disney movie or show again. This goes for any Disney-controlled property, too. No Avengers, no Toy Story, no Star Wars, no Simpsons, no Disney+, no Disney Channel, no Disneyland, no Disney World, no Euro Disney, o Disney comic books for anyone in my family. The few ones which remained from my childhood have been promptly thrown away.

Mulan is the best movie Disney has ever made. I'm going to watch it again when I go for my Brazilian wax.

That is the impersonator.

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Is the situation as dramatic as that? Is it possible that the country that defeated Nazi Germany and the Soviet Union will be defeated by a horde of savages?!

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I think President Trump should act. Can't he apply the RICO Act to Disney? Any trade aggrement with Red China should be conditioned to the total dismantling of all Chinese propaganda arms in the United States.

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You kind of overdid this one, Thiago. Too many pseudonyms that all say the same thing is pretty boring. At least crack a joke or something. Take your concern-trolling act elsewhere.

You want to silence the American people the way your masters want to silence the Hong Kong people.

We just want to silence you.

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Isn’t a dominant assurance contract more or less the same thing as a tender offer in the M&A context? I.e., I’ll buy your stock for $P+X per share if and only if at least 51% of stockholders tender their shares by Y date?

No. In your example if a majority sells the buyer pays the the current share price plus the promised premium. In a dominant assurance contract the entrepreneur only pays participating agents if they fail to raise the funds. But then in equilibrium that incentive assures that the dominant strategy for other agents is to participate at a level that the entrepreneur trying to provide a public good gets their project funded such that they do not have to pay out.

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"The incredible cost of the proposed bridge puts it beyond your limited resources..."

Really dumb (alleged) example of a Public-Good.
A nominal "bridge" is not of incredible {unbelievable} cost... and private individuals routinely build multi-billion dollar enterprises/businesses without begging their neighbors or securing tax funding.

There are no "Public Goods".

Public Goods Theory and its variants rest upon faulty assumptions and a strong belief in collectivist politics.

Any good that can be digitalized is a public good. They are clearly non-rivalrous (copies can be made at zero cost without depriving anyone else of the good) and arguably non-excludable. Yes, there are both legal (copyright laws) and technical (DRM) means to force them to be excludable, but just ask any student downloading their text books from Library Genesis, sports fan watching their soccer games on pirate sites or the general population on any low income country watching their Hollywood films on streaming sites how well these artificial obstacles are working.

One can even make an argument that digital goods should stay public goods since making them excludable introduces deadweight loss to the society. Of course, allowing them to be public goods makes them subject to the free-rider problem and dominant assurance contracts are one way to solve this problem.

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Which global corporation built the road your driveway connects to, and how do you pay the toll to use that road? And the one it connects yo and so on.

And if such things as public schools are easily privately funded, why aren't the areas controlled by the Taliban much more advanced, given they were funded privately by Saudis individuals. The name Taliban is derived from this private schooling.

Given the huge span of space and time with no tax funding of public goods, if this were better in producing results than government tax and spend providing public goods, you would have many nations, regions, periods in history of empires with zero government.

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I'll be the n-1 player who gets a free ride based on the last contribution of the person who was persuaded to contribute, making the good available.

Don't forget: a public good is non-divisible and non-excludable.

Go watch public television, drive down that street, or go to the lifeguarded beach, while being protected by the police and military.

By the way, the way we sometimes finance or support public goods by creating devices which enable persons to signal their status or achieve status within a group.

So, for example, for an additional $100 you can become a sustaining member, have your name on the list of contributors, and attend a sustaining member conference where your views will be listened to.

On the other hand, if you are a member, you still get the public good and a magazine.

Kickstarter has become a way to finance new projects for non-profits by selling symbolic or status goods for contributions.

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By the way, I do not need to reveal my preferences re a public good if I can just stand back and watch you try to enlist others in playing the game, since, if you do create the public good, I can still use it. Of course, there are other smart people like me, so....

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As for "public goods", don't assume that the wishes of large donors are ignored if you contribute:

"The Mercatus Center was founded and is funded by the Koch Family Foundations. According to financial records, the Koch family has contributed more than thirty million dollars to George Mason University, much of which has gone to the Mercatus Center, a nonprofit organization. Democratic strategist Rob Stein described the Mercatus Center as "ground zero for deregulation policy in Washington.” From Wikipedia

If it is a public good, are some publics more important than others, and how do you deal with a major donor.

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Shout out to the late Bob Nozick too! https://priorprobability.com/2018/07/27/nozick-tabarrok-and-dominant-assurance-contracts/

Thanks, putting AlexT's paper into plain English (in a word, it's crowd-funding charity) was helpful.

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Semi-related, in the sense of why we can't have nice things, like dominant assurance contracts. Or any other pragmatic approach to public goods.

It struck me yesterday that we are living in an Ayn Rand novel. No one else has captured the open and transparent, gutless, cravenness of a Lindsay Graham in fiction. No one has ever lived it like Republicans now. Lindsay Graham as Peter Keating.

The really perverse twist is that these sophistic mouthings covering the shallowest self interest came not from the collectivist left, but the populist right.

How corrupt was it? They openly conspire.

It used to be that it took the dark mind of Ayn Rand to even imagine such a thing.

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I wonder what this is about...?

*Clicks link*

Oh of course. We’re already back to your fevered dreams of Russia hacking voting machines, and it’s all a conspiracy with Trump and Graham coordinating the whole thing with the KGB.

Seek therapy.

The Russia to NRA to Trump funnel is obvious, based on public information. If you want to write it off, you too are a Rand character, and not the good kind. You are the kind that sacrifices virtue for .. what, a weak feeling of belonging with a bunch of other Peter Keatings?

Yes everything is a conspiracy theory.

Only you know the truth! The NRA is a Russian asset! Every republican is a Russian plant!

Hurry, please tell your local FBI office or mental health facility your secret knowledge.

+1

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"I speak with Paul Matzko at the Building Tomorrow podcast about pubic goods”

Would someone who has listened tell me whether or not "pubic" is a typo? If it's not, I'll totally listen.

It is indeed not a typo. Finally somebody is speaking out in favor of making replacing pubes with privates.

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Actually, there has been experimental research on various types of public goods games, with variations in thresholds and rebates. The experiments include rebates, payments ,etc. Here is the link, which also ranks the effectiveness of various incentive and rebate programs: https://voices.uchicago.edu/jlist/research/charitable-giving/

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So, if its simpler, cheap, to private build much needed infrastructure privately without government tax and spend, why isn't Alex att least on the board of multiple private institutions building such much needed infrastructure.

For example, lots of river crossing on the east coast that have been halted or blocked ever since Reagan entered the White House promising everything needed by the nation would be provided cheaper, faster, better,violating no individual rights, by turning everything over to the private sector.

The Obama administration make a river crossing between NJ and NYC a priority, and then Christ Christy did a Rezgan and refused Federal funding in 2009.

Now a decade later, the quest for funding that crossing is a priority, but the only option is even more tax and spend, or rather tax cut and spend by the Federal government plus from NJ and NY governments.

This is reaching crisis level because the new tunnel will allow the super critical old tunnel to be refurbished to repair the damage from flooding as a result of hurricane Sandy.

Trump promised a trillion in infrastructure based on the claims of those like Alex claiming the infrastructure can be built privately without government tax and spend.

Keep in mind, these projects do not produce free to use infrastructure. Instead, they produce infrastructure that charges users for the next century to pay for building, maintaining, and operating the infrastructure.

The pricing of use fees is extremely complex, in part because the public benefits goes do heavily to people who do not use the infrastructure directly.

The rail crossings are a substitute for scarce car and truck crossing infrastructure. The rail tunnel being unavailable increases the congestion on all those other substitutes.

In yet another decade, the Alex's have claimed they have a solution, but all the Alex's have done nothing to deliver needed, critical infrastructure in easily dozens of cases on the east coast transportation system.

Further, nothing has been done in California.

I would note that a century ago, private money built lots of infrastructure. Miami and the Keys exist today because of private infrastructure. See Henry Flagler.

For LA sprawl, see railroad and real estate tycoon Henry E. Huntington. The wikipedia summary:
"Railroads were one part of the enterprise. Revenue from passenger traffic rarely generated a profit, unlike freight. The real money for the investors was in supplying electric power to new communities and in developing and selling real estate. To get the railways and electricity to their towns, local groups offered the Huntington interest opportunities in local land. Soon Huntington and his partners had significant holdings in the land companies developing Naples, Bay City (Seal Beach), Huntington Beach, Newport Beach and Redondo Beach."
https://en.wikipedia.org/wiki/Pacific_Electric

Look at most old cities and you will find much of the city structure defined by private urban rail build by those involved in real estate development. But once public roads and cars became lower user fee substitutes and urban rail operators ran out of real estate to develop and sell based on their urban rail, these rail systems became insolvent, and the only operator was government. Government often replaced them with buses and built lots more tax funded roads.

Light rail/subways/massive highway upgrades provide huge benefits to the private land owners near them, or huge liabilities. Cheap infrastructure is generally a huge liability to the land owners near these projects, eg, the Boston Central Artery. The costly projects, like the Boston Big Dig, provide huge benefits to the nearby land owner (the Big Dig reversed the harms of the earlier project, but benefiting new owners, not the working class screwed in the 50s.)

Bottom line, non-government infrastructure almost always ending up run by government at great cost, with short term profit legacies that make it very hard and costly for government to resolve.

Yes, and. in fact, we need to look at how goods today are defined as public goods, given changes in technology.

In the past, some items became public goods because it was impossible to monitor usage and intensity of usage because the transactions costs of managing usage were high.

Today, we have many more ways on our cellphone or with magnetic id cards or any other device which links the user to a database which can compute usage and charge the person for use.

Also, there is differential usage intensity: trucks eat up the road, I don't know if cars do as much per mile. So, charge trucks for maintenance costs based on weight and usage, as well as tax based on another measure of usage, diesel or gas consumption. Same with cars. Same with usage of airports. Or stadiums.

Ironically, charging users for usage--as in an increase in gas taxes--is off the table, as far as Grover Norquist argues.

1. measuring not managing

2. Also, for some users, you might give a discount because they are a taxpayer of the jurisdiction, and charge out of town users a higher fee (or not give a discount off of list)

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