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From: radford@calgary.UUCP (Radford Neal)
Newsgroups: net.politics.theory
Subject: Re: Solution to Free Rider problem
Message-ID: <21@calgary.UUCP>
Date: Thu, 2-Jan-86 18:06:03 EST
Article-I.D.: calgary.21
Posted: Thu Jan  2 18:06:03 1986
Date-Received: Thu, 2-Jan-86 21:33:49 EST
References: <20@calgary.UUCP> <1757@dciem.UUCP>
Distribution: net
Organization: University of Calgary, Calgary, Alberta
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> 
> >Frequently one sees postings in this group claiming that so-called
> >"Free Rider" problems require government intervention for their solution.
> >A typical situation:
> >
> >     Residents of a river valley would all benefit from a dam upstream
> >     for flood control. But without the government taxing them to 
> >     pay for it, they will all wait for someone else to pay and hence
> >     the dam will never be built, to everyone's disadvantage.
> >...
> >I propose a solution here which eliminates the first bad result and 
> >most of the second.
> >
> >The dam gets built as follows:
> >
> >    A promoter for the scheme defines the project and determines how 
> >    much it will cost. He establishes a trust fund to be used to
> >    fund the scheme. Anyone may donate money to the trust fund. No
> >    money is disbursed until the fund contains enough money to 
> >    complete the project. If enough money is not collected by some
> >    specified time, all money is given back to the contributors.
> 
> I suppose, to be fair, that those who don't want the dam built are
> allowed to take out of the trust fund an amount corresponding to the
> damage they think it will cause them? (Of course, they would have to
> give it back if the dam eventually was not built ... but that's something
> for the grandchildren to worry about, isn't it?).

I was assuming in this illustrative example that everyone agreed that the
dam was a good idea, they just don't necessarily agree on *how* good it
is. If there are people harmed by the dam, buying their agreement to it
would be part of its cost.

> Do you really think anyone would contribute to such a crazy scheme?
> If so, I think I will set up a "Dams for Saskatchewan" fund.  I could
> do with an upgrade or two for my Mac!

Why do you think the scheme is crazy? The only argument you seem to be
giving is that implied by your last sentence. Do you really think it is
impossible to find reputable managers of such a trust fund?

> Martin Taylor

      Radford Neal