How to prevent public goods from being taken for free?

Written by: BruceXu, LXDAO

01 Popularize the concepts of public goods - taking weekend markets as an example

First of all, the weekend market is a market held in a square or parking lot on weekends. Vendors can apply for a stall and pay a certain rent to set up a stall, and then everyone can come and visit. Some sell food, some sell flowers or handicrafts, and some come to play music. It's probably like this:

The market is the so-calledCommons, that is, this is a public venue where everyone can come and enjoy the activities and goods on this public land.

On this public land, there are stalls selling goods.Competition and exclusivity, especially in the breakfast stalls. Because people's appetite is limited, if they eat a hot dog, they are unlikely to eat a basket of steamed dumplings.Competitiveness. Among the limited number of tourists, the more people eat my food, the more I earn.

If a specific item is bought by someone else, then there isExclusivityIf a product is sold to buyer A, it cannot be sold to buyer B. Similarly, merchants also have the ability to control whether to sell to a certain type of person, which is called exclusivity. When I went there, it was a little late, so the good figs had already been picked.

On this public land, there is another type of stall that hasNon-exclusive and non-rival, which is the so-calledPublic GoodsYes, this scene at the weekend market is the stall playing music.

Non-exclusiveReflected in:

1) You don’t need to pay to listen to music.

2) Music performers fail to make the music heard by designated people at the scene, thus excluding some people.

Non-competitiveReflected in:

1) Whether you have breakfast or buy something, you can listen to music.

2) There are multiple booths playing music, and people will not refuse to listen to the music.Xiaobai NavigationNever listen to another one.

The main profit model of this music stall is through donations, that is, a guitar bag is placed in front, and people can voluntarily donate money if they think the music sounds good.

However, this model has relatively large uncertainty and sustainability.

Assuming the donated money is not enough to make a living, then people may not choose to continue making music, and there will be no music on the commons.

This is another dimension.Tragedy of the Commons, that is, valuable public goods lack good support, causing damage to the entire ecosystem.

Here, we have an assumption that the music is pleasant to the ear rather than noise. Music can bring pleasant emotional value to people at the scene, which may attract more people to this area or make it easier for them to make consumption decisions.

Based on this assumption, the stalls near the music stall may have more traffic and sales. However, these stalls will not donate to the music stall. This is the so-calledHitchhiking, which means that people tend to take advantage of public resources for free.

So far, the concepts of public goods, tragedy of the commons, free-rider, competitiveness, and exclusivity have been explained.One more thing is that it is difficult to have absolute public goods.For example, if you leave this square, you can no longer hear this music. From the perspective of geographical location, it is exclusive. Therefore, the judgment of public goods is usually based on relative degree under certain conditions.

02 How to continuously maintain valuable public goods

How to identify and measure the value of public goods?

First of all, most people recognize the value of public goods. After all, everyone can benefit from them without paying any actual cost. It’s really nice to get them for free.This leads to the first question: How to identify and measure the value of public goods?

This is very easy to achieve for commodities. I spend money to buy a loaf of bread and eat my fill, which is a real benefit.

But when it comes to music, I feel happy when I listen to it. How can I measure it with money?This is a big public goods issue.For example, some publicly accessible papers may be incomprehensible to many people and therefore worthless. Or it is possible that a certain research is conducted based on them, and then a new technology is developed that changes humanity.

So how do we price this paper? Patents are a way to protect intellectual property, but they are also a restriction. Lawsuits and laws surrounding patents consume a lot of resources in human society and also restrict the development of some technologies.

If all research results were completely open public goods, would the world be different? This is a topic that DeSci is studying in the decentralized science direction.

If a public good has a clear value, things will be easier. For example, inviting a band to the scene can increase the booth management fee by $1,000, so the booth manager can pay $600 to the band to come to the square this weekend. But in fact, we can't measure it.Therefore, our discussion below is based on the premise that public goods are valuable.

How to achieve sustainability of public goods?

Take this music booth, for example. As a public good, how can it achieve sustainability? There are several options:

1. Donate

1. If the singing is good, people will be happy and consider donating. This is also the most direct and simple way to provide public goods, but the funds are usually very small because people like to get something for free. This is a typicalTragedy of the Commons.

2. This type of solution in Web3 includes Gitcoin, GiveETH, JuiceBox, Donate3 (LXDAO) etc.BlockchainTechnology optimizes donation processes and transparency.

3. Learn about Donate3: https://lxdao.io/projects/006

2. The venue operator pays the fees.

1. If it is verified that a market must have music, then the operator can support the stalls that are less profitable but necessary by charging stall fees and profits from other stalls.

2. This is the current tax mechanism, which allocates tax revenue to public goods such as infrastructure construction, school and education construction.

3. New distribution mechanism

1. If the output and value of public goods can be quantified - if it can be proved that a music stall can increase the turnover of surrounding stalls, then the benefited stalls should pay a certain fee to the music stall to achieve fair distribution of benefits.

2. In Web3, this approach is still in the research and exploration stage, but it is expected to achieve fair and efficient resource redistribution.

4. Commercialization

1. For example, setting up a paid song-ordering service, selling related merchandise, or hanging advertisements on stalls.

2. Another way is to cooperate with profitable stalls and share some operating costs. For example, in the fruit stall below, the stall owner uses speakers to play music (the red box in the figure below) to attract customers and provide music as a public good. The music stall only needs to pay the electricity bill for the cooperative stall.

3. In Web3, some new funds have been established, promising to invest part of their investment profits in supporting public goods. This may affect everyone's experience when it is commercialized, so Vitalik created the concept of "evil-income curve" (we will talk about it another day).

4. Evil – Income Curve – https://vitalik.eth.limo/general/2022/10/28/revenue_evil.html

03 Why should we pay attention to the sustainability of public goods?

Public goods are everywhere

It seems difficult to solve. Does the sustainability of public goods have anything to do with me? Or do we really need public goods?

In fact, the problem of public goods does not only occur in weekend markets or in one region or country.But it is everywhere.You may not go to weekend markets, but I believe you must surf the Internet every day. The Internet is a public land filled with countless public and non-public goods. Are you willing to accept an Internet like this:

1. You need to pay for a subscription before logging into any website to view information or download materials.

2. Almost all software requires some payment to use, and there is not much free software available.

3. Even though the software and website are free, they are filled with ads that pop up every time you click on them.

4. Commercial companies can restrict me from using their services, even if I am willing to pay. Without free and open source software competitors, commercial companies set sky-high prices.

The reason why you can enjoy the existing free, open and shared Internet to a certain extent is because of the existence of open source projects and digital public goods.

Open source contributors and public goods builders deserve praise

Why are these open source contributors and public goods builders worthy of praise?

It is because they are not afraid of the tragedy of the commons and are willing to make voluntary contributions without asking for anything in return.Just imagine how many people come to the weekend market and are willing to volunteer to help clean and maintain the public environment for free?

Open source projects and digital public goods have faced such great challenges, but have still helped create the current open and free Internet, thereby accelerating the development and historical process of all mankind.

Thinking in reverse, if we increase our attention, publicity, and support for public goods, and even personally participate in the construction of these public goods, donate a little money or participate in the development and maintenance of some open source projects, once some sustainability issues are resolved and the sustainability of public goods is no less than that of private goods and businesses, what will the world become?

The article comes from the Internet:How to prevent public goods from being taken for free?

Related recommendations: Bitget Research Institute: The market rebounded after a sharp drop, Meme and AI Strong sector performance

In the past 24 hours, many new popular currencies and topics have appeared in the market, and it is very likely that they will be the next opportunity to make money. Written by: Bitget Research Institute Abstract The rapid changes in the international situation have led to a rebound in the crypto market after a sharp drop. During the decline, the entire networkcontractThe liquidation of $708 million, of which $602 million was in long positions. During the market rebound…