Hi! I read up to Appendix 3. I like your post and your idea!
One critique: I think you underestimate the incentive for people to switch their current donations to effective organizations to CDM which may decrease the counterfactual value of this proposal such that it becomes negative. I’d be curious to hear more of your thoughts/research on this subject!
Also, I’ve been thinking about streamlining setting up a fund for my own money that guarantees my patient philanthropic donations. I’m interested in (1) seeing if this already exists; (2) starting CDM (or something like it) if this does not already exist. Shoot me an email at qmot3@gatech.edu if you’d like to discuss further!
Congratulations on your first post and thank you for making it! :)
Your criticism is valid. For me this is maybe the single biggest watchout.
The reason I believe this can be managed comes from looking at the way companies who market consumer goods (everything from shampoo to cars to iphones) manage what they call “cannibalisation”.
Very simple example: Let’s say Company A has a shampoo S and a conditioner C on the market, and these each have 10% share of their relative markets, each earning $10m in profit. Now an inventor in Company A says “Hey, I have a new product, SC, a shampoo with conditioner!”
The company tests this product and discovers they could sell enough to make $12m in profit. So it seems like a no-brainer. But before they do, they will first check the cannibalisation—how much of that $12m is actually coming from the profit they already make on products S and C.
in reality, the whole thing will be much more complex, but the gist of it is: company A will have a time-tested methodology to ensure that the combination S plus C plus SC is a better business model than just S plus C (the current model).
In an analogous way, I don’t think it’s realistic to say that there will be no loss of pure donations, but there will be quantitative ways to make sure that the net total donations to charities will be better than before. I didn’t go into this in detail, but obviously doing so would be a critical step in designing any real model.
Depending on the calculations, you would then adjust the parameters of the model. For example, you might decide that only donations after a certain minimum “pure donation” would be eligible if the model showed that this would ensure that the net total would necessarily be increased.
Happy to talk this in further detail if we get to the point of actually doing it. I’m sure there are econ majors and business majors who can cite papers and literature on the best way to do this, my experience is more on seeing the already completed analysis and how cannibalisation was factored into every potential new launch.
As for your second point, I am definitely curious to learn more and will email you! thanks!
Hi! I read up to Appendix 3. I like your post and your idea!
One critique: I think you underestimate the incentive for people to switch their current donations to effective organizations to CDM which may decrease the counterfactual value of this proposal such that it becomes negative. I’d be curious to hear more of your thoughts/research on this subject!
Also, I’ve been thinking about streamlining setting up a fund for my own money that guarantees my patient philanthropic donations. I’m interested in (1) seeing if this already exists; (2) starting CDM (or something like it) if this does not already exist. Shoot me an email at qmot3@gatech.edu if you’d like to discuss further!
Congratulations on your first post and thank you for making it! :)
Thank you Quentin!
Your criticism is valid. For me this is maybe the single biggest watchout.
The reason I believe this can be managed comes from looking at the way companies who market consumer goods (everything from shampoo to cars to iphones) manage what they call “cannibalisation”.
Very simple example: Let’s say Company A has a shampoo S and a conditioner C on the market, and these each have 10% share of their relative markets, each earning $10m in profit. Now an inventor in Company A says “Hey, I have a new product, SC, a shampoo with conditioner!”
The company tests this product and discovers they could sell enough to make $12m in profit. So it seems like a no-brainer. But before they do, they will first check the cannibalisation—how much of that $12m is actually coming from the profit they already make on products S and C.
in reality, the whole thing will be much more complex, but the gist of it is: company A will have a time-tested methodology to ensure that the combination S plus C plus SC is a better business model than just S plus C (the current model).
In an analogous way, I don’t think it’s realistic to say that there will be no loss of pure donations, but there will be quantitative ways to make sure that the net total donations to charities will be better than before. I didn’t go into this in detail, but obviously doing so would be a critical step in designing any real model.
Depending on the calculations, you would then adjust the parameters of the model. For example, you might decide that only donations after a certain minimum “pure donation” would be eligible if the model showed that this would ensure that the net total would necessarily be increased.
Happy to talk this in further detail if we get to the point of actually doing it. I’m sure there are econ majors and business majors who can cite papers and literature on the best way to do this, my experience is more on seeing the already completed analysis and how cannibalisation was factored into every potential new launch.
As for your second point, I am definitely curious to learn more and will email you! thanks!