Thanks for this. Your main concern is a very reasonable one.
To my mind, there is (at the moment) no clear path to get investors to adopt UO, and most of them have not heard of it before. There are someasset owners who have adopted it, but they are very much the exception, not the rule.
While these challenges definitely do reduce the probability of success of this project, it also increases the impact.
The counterfactual is that without this work, it would be highly unlikely that this would happen anyway.
I also agree that pricing externalities well is really hard.
Things that help here are:
the standard approach to modelling externalities is to do no modelling at all—so if we aim to outperform the existing models, we only have to produce a model which is better than nothing;
the financial system has successfully attracted lots of talented people—with enough time, getting lots of talented people to think about these problems should hopefully allow us to do a better job (maybe even a good job) of creating such models
Thanks for this. Your main concern is a very reasonable one.
To my mind, there is (at the moment) no clear path to get investors to adopt UO, and most of them have not heard of it before. There are some asset owners who have adopted it, but they are very much the exception, not the rule.
While these challenges definitely do reduce the probability of success of this project, it also increases the impact.
The counterfactual is that without this work, it would be highly unlikely that this would happen anyway.
I also agree that pricing externalities well is really hard.
Things that help here are:
the standard approach to modelling externalities is to do no modelling at all—so if we aim to outperform the existing models, we only have to produce a model which is better than nothing;
the financial system has successfully attracted lots of talented people—with enough time, getting lots of talented people to think about these problems should hopefully allow us to do a better job (maybe even a good job) of creating such models