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A Flexible Design for Funding Public Goods

Author

Listed:
  • Vitalik Buterin

    (Ethereum Foundation, 3600 Zug, Switzerland)

  • Zoë Hitzig

    (Harvard University, Cambridge, Massachusetts 02138)

  • E. Glen Weyl

    (Microsoft Research, New York, New York 10111)

Abstract

We propose a design for philanthropic or publicly funded seeding to allow (near) optimal provision of a decentralized, self-organizing ecosystem of public goods. The concept extends ideas from quadratic voting to a funding mechanism for endogenous community formation. Citizens make contributions to public goods of value to them. The amount received by the public good is (proportional to) the square of the sum of the square roots of contributions received. Under the “standard model,” this mechanism yields first best public goods provision. Variations can limit the cost, help protect against collusion, and aid coordination. We discuss applications to campaign finance and highlight directions for future analysis and experimentation.

Suggested Citation

  • Vitalik Buterin & Zoë Hitzig & E. Glen Weyl, 2019. "A Flexible Design for Funding Public Goods," Management Science, INFORMS, vol. 65(11), pages 5171-5187, November.
  • Handle: RePEc:inm:ormnsc:v:65:y:2019:i:11:p:5171-5187
    DOI: 10.1287/mnsc.2019.3337
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    References listed on IDEAS

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    1. How to Fund Open Source
      by Matthew Wildrick Thomas in Matthew Wildrick Thomas on 2021-03-11 00:00:00

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