Thanks for the link, which I had previously missed and which does contain some important considerations.
I’ve been assuming that the people who set up the first impact market will have the opportunity to affect the “culture” around certificates, especially since many people will be learning what they are for the first time after the market starts to exist, but I agree that eventually it will depend on what buyers and sellers naturally converge to.
One way that preference could be satisfied is to give each share a number. Funders will value the first shares most, because they are fully “counterfactual”, but if half of the value comes from a thing that the founder would have done anyway
I don’t understand this—if you need $1 million to do the project, isn’t the one millionth one-dollar share purchased doing just as much good as the first? I think I’m missing something about the scenario you’re thinking of.
Sorry, I could have been clearer. Suppose we want to choose (B) on (2). And I ask for retro funding for a painting I drew.
Let’s consider three cases:
a) it had $500 of impact, and I was 0% likely to make the painting anyway.
b) it had $1k of impact, 50% likely anyway
b) $2k of impact, 75% likely anyway.
The “obvious” solution is that in each case, I can sell some certs, say 100 for $5 ea.
Alternatively, we could say that in:
case
a) each cert 1-100 is worth $5
b) certs 1-50 are worth $10 ea, 51-100 $0
c) certs 1-25 are worth $20 ea, 26-100 worth $0.
The second solution allows the world to know how useful the painting/project was, though at the cost of some complexity.
The bottom-line I think is that the contract should be clear about which thing it purports to be doing.
I think the theoretically optimal way to distribute credit would be to compute Shapley values for each contributor (including the the founder) and distribute the funding accordingly. But this is of course usually not possible (because of limited information).
Whether you use Shapley values seems orthogonal to the question I’m asking—whether to price the shares non-uniformly, in order to estimate relative contributions.
Thanks for the link, which I had previously missed and which does contain some important considerations.
I’ve been assuming that the people who set up the first impact market will have the opportunity to affect the “culture” around certificates, especially since many people will be learning what they are for the first time after the market starts to exist, but I agree that eventually it will depend on what buyers and sellers naturally converge to.
I don’t understand this—if you need $1 million to do the project, isn’t the one millionth one-dollar share purchased doing just as much good as the first? I think I’m missing something about the scenario you’re thinking of.
Agree on affecting culture.
Sorry, I could have been clearer. Suppose we want to choose (B) on (2). And I ask for retro funding for a painting I drew.
Let’s consider three cases: a) it had $500 of impact, and I was 0% likely to make the painting anyway. b) it had $1k of impact, 50% likely anyway b) $2k of impact, 75% likely anyway.
The “obvious” solution is that in each case, I can sell some certs, say 100 for $5 ea.
Alternatively, we could say that in: case a) each cert 1-100 is worth $5 b) certs 1-50 are worth $10 ea, 51-100 $0 c) certs 1-25 are worth $20 ea, 26-100 worth $0.
The second solution allows the world to know how useful the painting/project was, though at the cost of some complexity.
The bottom-line I think is that the contract should be clear about which thing it purports to be doing.
I think the theoretically optimal way to distribute credit would be to compute Shapley values for each contributor (including the the founder) and distribute the funding accordingly. But this is of course usually not possible (because of limited information).
Whether you use Shapley values seems orthogonal to the question I’m asking—whether to price the shares non-uniformly, in order to estimate relative contributions.