Neat—do you know if any of them are actually considering this mechanism? I’d be curious to know whether their reasons align with mine, or if it’s “we’d love this, but the additional friction of tracking it ourselves rather than platform support makes it just a bit too difficult”.
It also has me thinking—there’s no reason it couldn’t be funded by supporters rather than the seeker of funding. Same benefits (more likely to go), same costs (loss rather than neutral if unfunded). Early supporters could specify “want the bonus if unfunded”, “just want refund if unfunded”, or “encourage funding by making my pledge non-refundable”.
Which is another step along the way to just having a general prediction market on whether it’ll be funded. Allow hedging and side-betting by anyone. This STILL encourages full funding, as the best way to manipulate the market is in the positive direction: pledge.
I’d be surprised if they’ve even heard about it, so I don’t think so, but I don’t actually know (I don’t know anything about the projects or the creators except the little they wrote there).
Yep, letting backers fund the refund bonuses would also be great. I’d love to see an experiment (either in a lab or in a real crowdfunding platform) try that.
What are the barriers to platforms offering the option? I suspect there’s limited value in artificial experiments—the interaction of different motivations and estimates of success for real projects and real funders is likely to be too varied to control for.
Naively, it would seem cheap for a platform to offer it to fund-seekers, and running code trumps all of our theoretical arguments.
I honestly don’t see any barriers. Either they simply don’t know about it, or maybe they think that feature is too complex or somehow not worth it, or they have reasons I haven’t thought of. If anyone knows I expect it would be Alex Tabarrok, cause any company interested in that would have likely contacted him. Otherwise, it might be a good idea to contact crowdfunding platforms and ask them about it.
[Edit 30/aug/2023]: The barrier is probably legal. Offering a refund bonus is like offering a security, so it would be subject to equity crowdfunding regulations (probably, I’m not a lawyer).
Neat—do you know if any of them are actually considering this mechanism? I’d be curious to know whether their reasons align with mine, or if it’s “we’d love this, but the additional friction of tracking it ourselves rather than platform support makes it just a bit too difficult”.
It also has me thinking—there’s no reason it couldn’t be funded by supporters rather than the seeker of funding. Same benefits (more likely to go), same costs (loss rather than neutral if unfunded). Early supporters could specify “want the bonus if unfunded”, “just want refund if unfunded”, or “encourage funding by making my pledge non-refundable”.
Which is another step along the way to just having a general prediction market on whether it’ll be funded. Allow hedging and side-betting by anyone. This STILL encourages full funding, as the best way to manipulate the market is in the positive direction: pledge.
I’d be surprised if they’ve even heard about it, so I don’t think so, but I don’t actually know (I don’t know anything about the projects or the creators except the little they wrote there).
Yep, letting backers fund the refund bonuses would also be great. I’d love to see an experiment (either in a lab or in a real crowdfunding platform) try that.
What are the barriers to platforms offering the option? I suspect there’s limited value in artificial experiments—the interaction of different motivations and estimates of success for real projects and real funders is likely to be too varied to control for.
Naively, it would seem cheap for a platform to offer it to fund-seekers, and running code trumps all of our theoretical arguments.
I honestly don’t see any barriers. Either they simply don’t know about it, or maybe they think that feature is too complex or somehow not worth it, or they have reasons I haven’t thought of. If anyone knows I expect it would be Alex Tabarrok, cause any company interested in that would have likely contacted him. Otherwise, it might be a good idea to contact crowdfunding platforms and ask them about it.
[Edit 30/aug/2023]: The barrier is probably legal. Offering a refund bonus is like offering a security, so it would be subject to equity crowdfunding regulations (probably, I’m not a lawyer).