Dony Christie and I have been having a back-and-forth about the phrase “public goods market” (often shortened to PGM)- originally, I coined the phrase as a way to refer to Quadratic Funding, a mechanism that is quite important, but whose most common name is prone to alienate non-technically minded folks, and not a very resonant name- whereas “public goods market” carries a clearer meaning even to an average person; while “a public good” and “a market” both have technical meanings that are leveraged by the phrase, it also evokes “the public good” (i.e. “the common good”) and a market place, concepts that typical people are familiar with.
While in the essay where I originally introduced the phrase, I acknowledged that the phrase “public goods market” could potentially refer to a larger set of mechanisms than just Quadratic Funding—any mechanism that creates a market that incentivizes the creation of public, not just private, goods can be described as a “public goods market”. I’ve also gotten into the habit of using the phrase and its acronym synonymously with QF. However, Dony took me to task on this, since he argues that assurance contracts (i.e. kickstarters) and dominant assurance contracts (ACs and DACs, respectively) are also public goods markets.
It’s certainly clear that kickstarters and DACs create public goods, where the scope of the “public” is the people who participate in (and clearly benefit from) the contract, which can be a quite large group of people, much larger than the stereotypical transaction, which only involves two people, a buyer and a seller [1].
So the question of whether kickstarters are public goods markets comes down to whether or not kickstarters are “markets”. Wikipedia introduces markets as “a composition of systems, institutions, procedures, social relations or infrastructures whereby parties engage in exchange”. Based on this definition, while a single kickstarter is not a market (just as the act of me buying a soda is not a market), a website such as Kickstarter or IndieGoGo, or the ecosystem within which they exist, is indeed a market—the systems and procedures are those of the kickstarter mechanism, the institution is the website, which provides the infrastructure, and the parties who participate in the kickstarter are engaging in an exchange, performing an action or creating a product, in return for others performing an action or providing monetary compensation.
So really, I need to break the habit of using “public goods market” to mean quadratic funding, and find a more specific and resonant phrase to refer to QF specifically.
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[1] One potential objection to viewing kickstarters as a mechanism that creates public goods, is that the mechanism still does not consider or handle negative externalites (i.e., bad things that will happen to people who are not participating in the contract), which QF is able to handle via negative votes (although in practice, I have seen negative votes be excluded from the mechanism when implemented, which I take issue with)
Dony Christie and I have been having a back-and-forth about the phrase “public goods market” (often shortened to PGM)- originally, I coined the phrase as a way to refer to Quadratic Funding, a mechanism that is quite important, but whose most common name is prone to alienate non-technically minded folks, and not a very resonant name- whereas “public goods market” carries a clearer meaning even to an average person; while “a public good” and “a market” both have technical meanings that are leveraged by the phrase, it also evokes “the public good” (i.e. “the common good”) and a market place, concepts that typical people are familiar with.
While in the essay where I originally introduced the phrase, I acknowledged that the phrase “public goods market” could potentially refer to a larger set of mechanisms than just Quadratic Funding—any mechanism that creates a market that incentivizes the creation of public, not just private, goods can be described as a “public goods market”. I’ve also gotten into the habit of using the phrase and its acronym synonymously with QF. However, Dony took me to task on this, since he argues that assurance contracts (i.e. kickstarters) and dominant assurance contracts (ACs and DACs, respectively) are also public goods markets.
It’s certainly clear that kickstarters and DACs create public goods, where the scope of the “public” is the people who participate in (and clearly benefit from) the contract, which can be a quite large group of people, much larger than the stereotypical transaction, which only involves two people, a buyer and a seller [1].
So the question of whether kickstarters are public goods markets comes down to whether or not kickstarters are “markets”. Wikipedia introduces markets as “a composition of systems, institutions, procedures, social relations or infrastructures whereby parties engage in exchange”. Based on this definition, while a single kickstarter is not a market (just as the act of me buying a soda is not a market), a website such as Kickstarter or IndieGoGo, or the ecosystem within which they exist, is indeed a market—the systems and procedures are those of the kickstarter mechanism, the institution is the website, which provides the infrastructure, and the parties who participate in the kickstarter are engaging in an exchange, performing an action or creating a product, in return for others performing an action or providing monetary compensation.
So really, I need to break the habit of using “public goods market” to mean quadratic funding, and find a more specific and resonant phrase to refer to QF specifically.
—
[1] One potential objection to viewing kickstarters as a mechanism that creates public goods, is that the mechanism still does not consider or handle negative externalites (i.e., bad things that will happen to people who are not participating in the contract), which QF is able to handle via negative votes (although in practice, I have seen negative votes be excluded from the mechanism when implemented, which I take issue with)