I agree with your general point about changing value of certificates as we get more information being a feature (this is the kind of thing I meant by tapping into market mechanisms).
Suppose in 2000 a funder buys some certificates that (they think) represent lives saved in 2000. They are happy with that investment, and just to keep the certificates indefinitely; it is not clear that those certificates will ever change hands again after 2005.
OK, I see you’re envisaging a less liquid market than I was. Though there are certainly some situations where I’d expect people to sell long after the fact. For instance if someone dies 40 years later and the certificates pass to their next-of-kin who doesn’t value the work, they might well seek to sell them.
In order to understand whether this is a state which would be desirable, I’m trying to picture what the world would look like today if we’d been using these since, say, 1800, and there were lots of old certificates lying around. I haven’t been able to provide myself with a stable picture of this, which makes me somewhat sceptical.
If a funder had the opportunity to “undo” their earlier funding opportunities and get back the money, how often would they take it?
I think this would happen a lot as people gained information. Then funding gives you an option value of cashing out, whereas not funding wouldn’t necessarily give you the chance of retroactively buying the thing (people would also fund more high-variance things). Of course that doesn’t mean that people would want to sell the certificates, because information that made them want their money back would also tend to drop the going price for the certificates.
My point is that the existence of future funders who don’t care much about “Lives saved in 2000” can never drive down the value of such a certificate, it can merely drive up the value of certificates that the future funders care about.
If the market becomes illuiqid (once the funders who care about lives saved in 2000 are gone), this shouldn’t be troubling to the funders left with the certificates, since that just means they are assuming responsibility for the things they funded (as in the status quo).
That said, I don’t see why there is any problem with valuating the old certificates, aside from skepticism about whether anyone in 2000 cares enough about the good deeds done in 1800 and would actually honor certificates.
I agree with your general point about changing value of certificates as we get more information being a feature (this is the kind of thing I meant by tapping into market mechanisms).
OK, I see you’re envisaging a less liquid market than I was. Though there are certainly some situations where I’d expect people to sell long after the fact. For instance if someone dies 40 years later and the certificates pass to their next-of-kin who doesn’t value the work, they might well seek to sell them.
In order to understand whether this is a state which would be desirable, I’m trying to picture what the world would look like today if we’d been using these since, say, 1800, and there were lots of old certificates lying around. I haven’t been able to provide myself with a stable picture of this, which makes me somewhat sceptical.
I think this would happen a lot as people gained information. Then funding gives you an option value of cashing out, whereas not funding wouldn’t necessarily give you the chance of retroactively buying the thing (people would also fund more high-variance things). Of course that doesn’t mean that people would want to sell the certificates, because information that made them want their money back would also tend to drop the going price for the certificates.
My point is that the existence of future funders who don’t care much about “Lives saved in 2000” can never drive down the value of such a certificate, it can merely drive up the value of certificates that the future funders care about.
If the market becomes illuiqid (once the funders who care about lives saved in 2000 are gone), this shouldn’t be troubling to the funders left with the certificates, since that just means they are assuming responsibility for the things they funded (as in the status quo).
That said, I don’t see why there is any problem with valuating the old certificates, aside from skepticism about whether anyone in 2000 cares enough about the good deeds done in 1800 and would actually honor certificates.