https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3243656

Introduction

(LR is) as flexible and responsive as the market, but avoids free-rider problems.

  • Flexible and responsive: any one can propose a new public good project, and the project can get enough fundings even when only a small community funds it.
  • Subsidies create incentives for citizens to fund projects.

Background

(Free-rider problem is) due to the expense or inefficiency involved in excluding individuals from access.

Cons of Existing Solutions

  • 1p1v: oppress minorities.
  • Capitalism: inefficiently exclude potential users.
  • Charitable organization: difficult to closely align reliably with the common good.
  • QV: it doesn’t solve the problem of flexibility, a.k.a., it requires a curated projects list.

Model

Assumptions

  • We can verifiably distinguish among and identify these citizens.
  • Any citizen may at any time propose a new public good.
  • Our interest here is in maximization of dollar-equivalent value rather than achieving an equitable distribution of value.
  • Utility function V is concave (国内的叫法一般是反的,即我们平常说的凸函数), smooth, increasing.
  • The deficit is not bounded, a.k.a, the funding solution can collect unbounded taxes.