3 ms·

> then there is simply no way for anyone to send $99 to try to get at that randomnes can't I send one of the 10 people $99 today, and he pays me out in 10 day

> then there is simply no way for anyone to send $99 to try to get at that randomnes can't I send one of the 10 people $99 today, and he pays me out in 10 days? Can't that person rent the fact he/she is on the list of 10 out. I am new to economic terms, but it seems your example even better shows his MC_rent + MC_nonrent = MR. Where he says in p2p systems MC_rent should be 0, because it's exclusionary. Again .. your example's main feature is that it excludes all but 10 people.

dlubarov 9y ago
> can't I send one of the 10 people $99 today, and he pays me out in 10 days? But if he already received the $100, why would he trade his $100 for your $99? Are you saying the recipient might want $99 now rather than $100 later? Let's say that the donor doesn't give any advanced notice; the recipient doesn't know they've been selected until they see $100 appear in their bank account.
- roenxi 9y ago
  The example given is a bit fuzzy about what it is showing and what assumptions are being made. This example is pretty bizarre because we have actors behaving economically irrationally (the $100 provider) and beneficiaries (I'll call them listees) who don't seem to have volunteered. I think it might be meant to simulate the creation of new money, but I don't accept the situation as being similar enough to be sensible (because no money is being created). Mr-give-away-$100 is burning resources (his cash reserves) to create an asset for 10 people (the potential to be given money randomly in the future, which is a strange financial asset). That asset is absolutely saleable on a secondary market and will be priced at some value south of $100. We can deduce who is on the list by observing who gets the $100 payments and deduce the probability after a few days of observation. The listees have incentive to provide this information as asset + secondary market is better for them than asset + no secondary market. Upper bound: Nobody is going to pay >$100 for a promise of $100 (I lie, that does happen, but only in rare and extreme circumstances. We'll ignore those). Lower bound: If the listed individual needs money NOW for some reason, which does happen in practice, then they may be willing to sell at any price >$0. Mechanism: A contract. They work well for events that happen in the future. Motive: The listees are giving up a small amount of value to smooth out their income stream. Results: When the $100 is transferred out of Mr-give-away-$100's account it will immediately be transferred to someone who bought it for some value $100 > X > $0; at a guess probably in the high $90 range. The person who was gifted a free asset will get rich, but that can be realised before the actual payment is made.
  - dlubarov 9y ago
    Such contracts would not really add any net costs to the system, since they cost virtually no resources. Whereas if I send $100 to the winner of a PoW contest, then $99 worth of electricity will be expended. Even if the contracts did add some costs to the system, PoW systems can have similar contracts. I could join a PoW pool and agree to share any $100 rewards I receive with the pool. Alternatively, we could just avoid the matter of contracts by replacing $100 with $1. $1 is small enough that nobody would need to think about diminishing returns, so there would be little point in spreading out the risk.

dlubarov 9y ago

> can't I send one of the 10 people $99 today, and he pays me out in 10 days? But if he already received the $100, why would he trade his $100 for your $99? Are you saying the recipient might want $99 now rather than $100 later? Let's say that the donor doesn't give any advanced notice; the recipient doesn't know they've been selected until they see $100 appear in their bank account.

roenxi 9y ago
The example given is a bit fuzzy about what it is showing and what assumptions are being made. This example is pretty bizarre because we have actors behaving economically irrationally (the $100 provider) and beneficiaries (I'll call them listees) who don't seem to have volunteered. I think it might be meant to simulate the creation of new money, but I don't accept the situation as being similar enough to be sensible (because no money is being created). Mr-give-away-$100 is burning resources (his cash reserves) to create an asset for 10 people (the potential to be given money randomly in the future, which is a strange financial asset). That asset is absolutely saleable on a secondary market and will be priced at some value south of $100. We can deduce who is on the list by observing who gets the $100 payments and deduce the probability after a few days of observation. The listees have incentive to provide this information as asset + secondary market is better for them than asset + no secondary market. Upper bound: Nobody is going to pay >$100 for a promise of $100 (I lie, that does happen, but only in rare and extreme circumstances. We'll ignore those). Lower bound: If the listed individual needs money NOW for some reason, which does happen in practice, then they may be willing to sell at any price >$0. Mechanism: A contract. They work well for events that happen in the future. Motive: The listees are giving up a small amount of value to smooth out their income stream. Results: When the $100 is transferred out of Mr-give-away-$100's account it will immediately be transferred to someone who bought it for some value $100 > X > $0; at a guess probably in the high $90 range. The person who was gifted a free asset will get rich, but that can be realised before the actual payment is made.
- dlubarov 9y ago
  Such contracts would not really add any net costs to the system, since they cost virtually no resources. Whereas if I send $100 to the winner of a PoW contest, then $99 worth of electricity will be expended. Even if the contracts did add some costs to the system, PoW systems can have similar contracts. I could join a PoW pool and agree to share any $100 rewards I receive with the pool. Alternatively, we could just avoid the matter of contracts by replacing $100 with $1. $1 is small enough that nobody would need to think about diminishing returns, so there would be little point in spreading out the risk.