Tag Archives: PayForResults

DIY vs. PFR Matchmaking

Our tax system often encourages “doing it yourself” (DIY), because when you buy products or services from others, you pay sales taxes and they pay income taxes, none of which you pay if you just do it yourself. But I see larger forces encouraging DIY.

I’ve posted on how during the early industrial revolution people reasonably feared that the new regimentation that had so increased productivity at work would be applied to our leisure lives. But we chose to forgo the huge productivity gains often realized in military, school, and orphanage dorms, and instead we each did our own food, clothes, home decorations, etc. Our bodies and rooms would in general look better and be more comfy, all at less cost, if we let professionals make such choices. But we don’t.

I’ve also noticed that my grad students seem to feel a strong need to invent their own research ideas, instead of taking suggestions from professors. Even if that hurts their success chances. And I’ve recently seen a majority of my Twitter respondents oppose my proposal to, at no cost, give people a career agent with an interest in advising and promoting their career. And of course we often see people hostile to getting advice on most things, including careers.

From all this I conclude that we have a strong and increasing DIY norm. (Why exactly I’ll leave for another post.) We are especially wary of advice and help from those who are not close associates, or if they financially profit from helping. (And I’ve posted on how little we seem inclined to rely on track records when we do pay advisors.) 

Which brings us to matchmaking, an activity that we today mostly DIY (often via mate shopping apps), even though professional matchmakers were once far more popular. I posit the increased DIY norm as the main cause of this trend. Even so, I want to outline here how we could use paying-for-results (PFR) to do better matchmaking. To add to my list of suggested ways that we could pay more for results. 

Now, first I should note that it seems to me obvious that matchmakers could help many to find mates, and that better mates can be worth a lot. There is just so much that many older people understand about people and their mating that so many young people don’t understand. This seems confirmed by matchmaking being quite common in ancient societies. So I just can’t buy this common claim that it is impossible to make matches, that only the two people involved could possibly in any way predict their match; that’s just crazy. 

The hardest task in paying for results is finding a good enough proxy for the results desired. But for people who seek long term relations, we do seem to have a simple adequate proxy: how long the relation lasts. Thus my basic proposal is to agree to meet with a matchmaker’s suggestions for some period (say a year), and then if you marry (or move in with) someone so suggested within some period (say five more years), you after that pay the matchmaker $X per month (or perhaps Y% of income) until you divorce or die (or move out). 

Yes this doesn’t get at all of how much you like your marriage, but it gets at a key part of that. And it seems unlikely that a couple would pretend to split up, or long delay their relation, just to avoid paying the matchmaker.

Now this can’t be the whole proposal, as most anyone might be willing to give you a long list of names in exchange for being paid $X per month if you happen to marry someone on the list. You’d need a good way to decide who to pick as your matchmaker. 

My first idea here is to hold an auction; see who will pay you the most for the right to be paid $X/mo. if you marry one of their suggestions. But what if you hold an auction with no intention of marrying anyone, just to gain auction revenue? To fix that, we might have the auction revenue returned, with perhaps an added penalty, in the case where you marry none of the candidates suggested. But perhaps some would then plan to have a fast marriage and divorce, just to get the auction revenue. Maybe it would be enough to require that the auction revenue is only spent on meeting with suggested candidates. Or give the auction revenue to charity. Or maybe matchmakers could use other ways to check that you are serious about finding a mate. 

Another approach to choosing the matchmaker might be to use track records of success; how often do clients get married, and how long do those marriages last. With good enough data there, one might not even need the direct $X/mo. incentives. But today few matchmakers show any track records at all, and so it could take a while for new matchmakers to collect such data. The direct incentives could help until such track records are available, and might continue to help enough afterward.

In a few polls, 40% of my Twitter respondents said their main reason for wariness of a matchmaker is fear that their advice is random, while 60% said a clear track record is what would most make them likely to use a matchmaker. Which suggests there is an opportunity here; if we collect enough data, and use strong enough incentives, maybe matchmakers could actually help people to better find long-term love, to our overall benefit. 

GD Star Rating
loading...
Tagged as: ,

Sell Tax Rights To Make Agents

Assume the federal government is owed X% of a certain person’s future wages w(t). Or some fixed function F(w(t)). You might not think the government entitled to such income taxes, but you gotta admit the odds of changing this situation anytime soon look slim.

I propose that the government auction off this right to collect these income taxes. Ideally at birth, if not sooner. Government could use the auction revenue to pay off part of its government debt, and thus in effect convert one kind of debt into another. So the government’s expected tax revenue need not suffer.

This selling-tax-rights action would create a job agent out of the auction winner. Someone with an incentive to try to help and promote this taxpayer, to get them to earn more money, and thus to pay more taxes to their agent. The auction would find the person or organization who thinks they can do this job best, and if they actually succeed then they would benefit. And if this system works on average then the government also gains in expectation at auction time.

This system would probably also benefit the taxpayer themselves, as we aren’t giving the agent any powers but persuasion. The agent can suggest options and strategies to the taxpayer, and can recommend the taxpayer to others. But the taxpayer and others can ignore any of this advice, and can refuse to divulge any info to this agent.

The agent could at any time sell their agency role to anyone else who thought they could do a better job. This might be to the parents or schools of children. For adults, it might be to an employer. Or adults might buy the rights to become their own agent, maybe taking out loans to pay for that. As long as these various agents do a better job advising and promoting the taxpayer than would the government, this system becomes a net win for all parties, at least in expectation.

You might worry that an agent would threaten their taxpayer, saying that unless the taxpayer does certain unpleasant things the agent will refuse to advise or promote them, and thus somehow trash their career. This seems an unlikely problem to me, but if this issue becomes a dealbreaker, I know how to use conditional speculative markets to solve it, at the cost of a bit more mechanism complexity.

You might worry that an agent would be mistaken about their ability to help, and thus harm their taxpayer in the process of hurting themselves. Thinking you were protecting both parties, you might regulate who is allowed to become an agent, and what agents are allowed to do. I don’t recommend this path, but I admit that only severe regulation might kill off most benefits of this system.

If the taxpayer dies, then of course their agent stops getting paid. So agents will want to advise on health, in addition to careers. And on anything that promotes health. For example, if getting happily married helps careers, the agent will want to advise on that. If a taxpayer emigrates, their target nation might not accept this taxation transfer system, in which case the agent would also lose. But this is a standard reason nations have given for not allowing citizens to emigrate; as the world hasn’t accepted that argument for nations, I don’t see why they’d accept it for agents.

Once the rights to tax revenue is sold to agents, governments would lose a direct incentive to provide services to citizens in order to increase citizen income. But governments would retain the incentive to create the appearance of high future income, to induce higher auction prices. And modern governments mainly choose service levels to citizens based on the threats and actions of voters, not based on government calculations on tax revenue.

What about non-federal governments? Well they could just collect their taxes as usual. Or their taxes could also be auctioned off at birth, and then the federal government could over time reimburse the jurisdiction where the taxpayer resides for their lost taxes. This second approach seems preferable, as it creates stronger agent incentives.

And that’s my proposal. Looks like a clear win-win for everyone. What don’t you like?

Added 10p: Please note that I did not propose to give agents control over how taxes are collected. This is not about “tax-farming.” No need or reason to change the tax collection process for this system. The IRS collects taxes because it is assigned to do so, not because the rest of the government gets to spend the money right then. I collects taxes nearly the same no matter who gets the tax revenue or when.

Yes, agents would want to lobby for higher taxes, while taxpayers want to lobby for lower taxes. Taxpayers have more votes, however, to influence policy, and their long term incentives are for good tax levels. Note that a similar problem is that governments can print money to avoid having to pay their debts, yet this only rarely actually happens. Just as governments are afraid to scare bondholders, since that raises the interest rates they pay, governments should be afraid to scare tax auction bidders, as that would lower their auction revenue.

There is a reasonable concern that taxpayers might try to commit to trash their lives, or to emigrate, until they are sold their agent rights. Or until a secret ally can buy their rights. As with insurance fraud, it probably works sufficiently well to call this behavior fraud, criminalize it with large penalties, and offer rewards to those who report violations. And we don’t have to let emigrants who stop paying taxes ever return.

Many offer the generic works-against-anything argument “We can’t allow a conflict of interest to exist between two groups, as the bad side might lobby harder”. Here the groups are agents and taxpayers re tax levels.

If there any doubts re if individual taxpayers would benefit, let’s only auction the rights for a random half (or tenth) of the population. That would also reduce problems with changing enforcement and revenue patterns. And maybe also only for newborns whose parents approve.

Added 20Mar: Another solution to the fiscal discipline problem is to put the auction revenue into a separate trust fund like we do with social security payments. Also, see my next post for a poll on this topic.

Added 21Mar: Here is a related proposal. Also, maybe once a year the government can include info on how to contact your agent in the mail they send you about your taxes. See more comments on the idea here.

Added 22Mar: Most who dislike seem mainly offended by their not being able to pick their agent. But if the relation is much more productive in that case, then target-picked agents should be able to win auctions, and get other agents to sell the role to them.

Added 24Mar: We should also note that this would allow ordinary people to invest more easily in, and diversify more over, a whole new class of assets. That should be worth something in terms of reducing risk for any given average return.

Added 30Jun2021: I tried to write a easier clearer presentation of the idea.

GD Star Rating
loading...
Tagged as: , ,

Utopia’s Garden, World, and Wall

Imagine that you lived in the “human quarter” of a vast city full of diverse aliens, all on a planet far from Earth. These aliens are quite strange and hard to understand in many ways, and so cannot simply be trusted, though your city does manage to usually maintain basic overall peace and law. As your human quarter is too small to be self-sufficient, it must trade and interact a lot with the rest of the city. Not just in physical goods, but also in work and social coordination. As a result, many humans participate in many alien-dominated orgs.

In this “human quarter in an alien city” scenario, your social concerns would come in three areas: (a) close relations between humans (b) global coordination among all species across a city or larger scales, and (c) humans interactions with aliens. That last area of concern is the one that seems the most interesting to me, and where I have the most to say.

Close human relations are harder to reason about abstractly, and can depend greatly on human nature and local culture. Global coordination is the sort of topic that many compete to discuss, making it unlikely that I can add much, or that the world would listen to me if I did. But it seems more feasible to find interesting and general things to say about how very different and distrusting species can usefully interact.

Consider this in terms of “utopia” (or “heaven”). If it were possible, we’d all like to built and maintain utopias. And utopias have three key issue areas, which I’ll call “garden”, “world”, and “wall”.

Well inside each utopia is a “garden”, full of rich detailed life, energy, color, aromas, passions, conflict, and play. Gardens give deep and even spiritual meaning and satisfaction, but depend crucially on complex opaque details of residents. Each utopia may have very different gardens, all full of life, but living very different lives. Making it hard to say much in general about how to manage gardens. Each utopia may have to mostly learn on its own here.

Utopias all exist in a larger “world”, a larger world that will try to coordinate in many ways, but will also fail to coordinate in as many ways. How exactly that grand coordination should be organized will always be a big political issue, on which many will compete fiercely to influence. Your utopia will want to play its part in this larger game, but can’t expect to have great influence there.

As David Lloyd Dusenbury argues in a thoughtful essay:

The basic intuition of all utopian fiction [is that] the perfect modern state—like the optimal city of antiquity—is sheltered by strong borders.

If your utopia is a small part of a nearby larger world, then to achieve many of their ends residents will want to interact with that larger world in many ways. And as those other parts of the larger world aren’t part of your utopia, you will have to be careful about how you do this. The world today is actually full of creatures that may look human-like and understandable, but are actually quite alien and inscrutable. You’d do better to treat them as aliens than as friends.

Thus your utopia must have a “wall”, i.e., an interface between it and the world. You can’t presume that those you interact with out there share your utopian norms, culture, attitudes, or feelings of utopian solidarity. And if you try to make your interactions depend on the details of their norms, culture, etc., you’ll need to do that differently for each of the different kinds of others with which you interact.

There thus may be a place for thinking in general about utopian walls. About how your utopia’s precious garden might be better promoted via the right levels and types of interactions with outsiders. And instead of using a different type of interaction for each different type of outsider, it may work better to find good general ways that people from different utopias and sub-worlds can reliably and useful interact. That is, utopias may well want to have rather similar walls, even if they have very different gardens.

This is how I’ve come to think about my work onpaying for results.” It is a hands-off distant relation, in which you admit that you don’t know much about how to judge the expertise you are trying to buy, and you don’t seek close emotionally-satisfying relations with such experts. Thus you are willing to consider simple general interaction policies, designed to let you get as much as possible out of the relation, while also allowing as much skepticism as possible about those strange outsiders and their odd and untrustworthy ways.

I fully admit that it isn’t enough for a utopia to merely have good walls, or to sit in a good-enough world. It will also need good gardens, and arms-length paying for results may be poorly suited for that. But good walls are an important element, and that is at least something where abstract thinking and analysis of the sort I’m good at may well have a lot to offer.

Added: In this Twitter poll, my answer is least popular:

GD Star Rating
loading...
Tagged as: ,

Science 2.0

Skepticism … is generally a questioning attitude or doubt towards one or more items of putative knowledge or belief or dogma. It is often directed at domains, such as the supernatural, morality (moral skepticism), theism (skepticism about the existence of God), or knowledge (skepticism about the possibility of knowledge, or of certainty). (More)

Humans have long had many possible sources for our beliefs about the physical world. These include intuitive folk physics, sacred scriptures, inherited traditions, traveler stories, drug-induced experiences, gadget sales pitches, and expert beliefs within various professions. And for a very long time, we paid the most attention to the highest status sources, even if they were less reliable. This encouraged gullibility; we often believed pretty crazy stuff, endorsed by the high status.

One ancient high status group was astronomers, whose status was high because their topic was high – the sky above. It so happened that astronomers naturally focused on a small number of very standard parameters of wide interest: the sky positions of planets and comets (anything that moved relative to the stars). Astronomers often gained status by being better able to predict these positions, and for this purpose they found it useful to: (1) collect and share careful records on past positions, (2) master sufficient math to precisely describe past patterns, and (3) use those patterns to predict future parameter values.

For a long time astronomy seemed quite exceptional. Most other domains of interest seemed to have too much fuzziness, change, and variety to support a similar approach. What can you usefully measure while walking through a jungle? What useful general patterns can simple math describe there? But slowly and painfully, humans learned to identify a few relatively stable focal parameters of wide interest in other domains as well. First in physics: velocity, weight, density, temperature, pressure, toughness, heat of reaction, etc. Then in dozens of practical domains.

With such standard focal parameters in hand, domain experts also gained status by being able to predict future parameter values. As a result, they also learned that it helped to carefully collect shared systematic data, and to master sufficient math to capture their patterns.

And thus beget the scientific revolution, which helped beget the industrial revolution. A measurement revolution starting in astronomy, moving to physics, and then invading dozens of industrial domains. As domains acquired better stable focal parameters to observe, and better predictions, many such domains acquired industrial power. That is, those who had mastered such things could create devices and plans of greater social value. This raised the status of such domain experts, so that eventually this “scientific” process acquired high status: carefully collecting stable focal parameters, systematically collecting and sharing data on them, and making math models to describe their patterns. “Science” was high status.

One way to think about all this is in terms of the rise of skepticism. If you allow yourself to doubt if you can believe what your sources tell you about the physical world, your main doubt will be “who can I trust?” To overcome such doubt, you’ll want to focus on a small number of focal parameters, and for those seek shared data and explicit math models. That is, data where everyone can check how the data is collected, or collect it themselves, with redundant records to protect against tampering, and explicit shared math models describing their patterns. That is, you will turn to the methods to which those astronomers first turned.

Which is all to say that the skeptics turned out to be right. Not the extreme skeptics who doubted their own eyes, but the more moderate ones, who doubted holy scriptures and inherited traditions. Our distant ancestors were wrong (factually, if not strategically) to too eagerly trust their high status sources, and skeptics were right to focus on the few sources that they could most trust, when inclined toward great doubt. Slow methodical collection and study of the sort of data of which skeptics could most approve turned out to be a big key to enabling humanity’s current levels of wealth and power.

For a while now, I’ve been exploring the following thesis: this same sort of skepticism, if extended to our social relations, can similarly allow a great extension of our “scientific” and “industrial” revolutions, making our social systems far more effective and efficient. Today, we mainly use prestige markers to select and reward the many agents who serve us, instead of more directly paying for results or following track records. If asked, many say we do this because we can’t measure results well. But as with the first scientific revolution, with work we can find ways to coordinate to measure more stable focal parameters, sufficient to let us pay for results. Let me explain.

In civilization, we don’t do everything for ourselves. We instead rely on a great many expert agents to advise us and act for us. Plumbers, cooks, bankers, fund managers, manufacturers, politicians, contractors, reporters, teachers, researchers, police, regulators, priests, doctors, lawyers, therapists, and so on. They all claim to work on our behalf. But if you will allow yourself to doubt such claims, you will find plenty of room for skepticism. Instead of being as useful as they can, why don’t they just do what is easy, or what benefits them?

We don’t pay experts like doctors or lawyers directly for results in improving our cases, and we don’t even know their track records in previous cases. But aside from a few “bad apples”, we are told that we can trust them. They are loyal to us, coming from our nation, city, neighborhood, ethnicity, gender, or political faction. Or they follow proper procedures, required by authorities.

Or, most important, they are prestigious. They went to respected schools, are affiliated with respected institutions, and satisfied demanding licensing criteria. Gossip shows us that others choose and respect them. If they misbehave then we can sue them, or regulators may punish them. (Though such events are rare.) What more could we want?

But of course prestige doesn’t obviously induce a lawyer to win our case or promote justice, nor a doctor to make us well. Or a reporter to tell us the truth. Yes, it is logically possible that selecting them on prestige happens to also max gains for us. But we rarely hear any supporting argument for such common but remarkable claims; we are just supposed to accept them because, well, prestigious people say so.

Just as our distant ancestors were too gullible (factually, if not strategically) about their sources of knowledge on the physical world around them, we today are too gullible on how much we can trust the many experts on which we rely. Oh we are quite capable of skepticism about our rivals, such as rival governments and their laws and officials. Or rival professions and their experts. Or rival suppliers within our profession. But without such rivalry, we revert to gullibility, at least regarding “our” prestigious experts who follow proper procedures.

Yes, it will take work to develop better ways to measure results, and to collect track records. (And supporting math.) But progress here also requires removing many legal obstacles. For example, trial lawyers all win or lose in public proceedings, records of which are public. Yet it is very hard to actually collect such records into a shared database; many sit in filing cabinets in dusty county courthouse basements.

Contingency fees are a way to pay lawyers for results, but they are illegal in many places. Bounty hunters are paid for results in catching fugitives, but are illegal in many places. Bail bonds give results incentives to those who choose jail versus freedom, but they are being made illegal now. And so on. Similarly, medical records are more often stored electronically, but medical ethics rules make it very hard to aggregate them, and also to use creative ways to pay doctors based on results.

I’ve written many posts on how we could work to pay more for results, and choose more based on track records. And I plan to write more. But in this post I wanted to make the key point that what should drive us in this direction is skepticism about how well we can trust our usual experts, chosen mainly for their prestige (and loyalty and procedures) and using weak payment incentives. You might feel embarrassed by such skepticism, thinking it shows you to be low status and anti-social. After all, don’t all the friendly high status popular people trust their experts?

But the ancient skeptics were right about distrusting their sources on the physical world, and following their inclination helped to create science and industry, and our vast wealth today. Continuing to follow skeptical intuitions, this time regarding our expert agents, may allow us to create and maintain far better systems of law, medicine, governance, and much more. Onward, to Science 2.0!

GD Star Rating
loading...
Tagged as: ,

Five Ways to Rate

When we have people and orgs do things for us, we need ways to rate them. So we can pick who to have do what, and how much to have them do. And how we evaluate suppliers matters a lot, as they put great effort into looking good according to the metrics we use.

Results – When we buy a pound of roast chicken, or have someone to mow our lawn, we can pretty directly pay for the things we want. The more aspects of what we want that we can articulate and verifiably measure, the more of them we can specify in a contract. When action is risky, not always reliably producing desired results, paying for results means those who do things face payment risk, which they don’t like. And competitors might find a way to produce better results and displace them, a risk they also don’t like.

Record – If we get similar things over and over in a relatively stable context, and also stick with one provider for a while, then we can see a track record of how well they do for us. So we can pay them more of a steady fee not as closely tied to what we get, and drop them when their record seems unsatisfactory. We might switch between providers to sample quality, or hear gossip from associates about their experiences. Groups like Consumer Reports can collect stats on overall customer results. Suppliers face lower payment risks here, though still substantial competition risks.

Prestige – When data on customer results isn’t available, we may rely on a general opinion based on many weak clues about the quality of relevant people and orgs. For people, such clues include wealth, attractiveness, intelligence, social savvy, well-connectedness, etc. For orgs, there is also name-recognition, sponsorships, prestigious projects, and many other elements. Early education and training varies in prestige and adds to individual prestige. When individuals affiliate with orgs, the prestige of each adds to the prestige of the other. I count network effects under prestige; you use the system everyone else respects, As prestige is usually pretty stable over time, suppliers chosen by prestige tend to have a secure position.

Loyalty – While we less often admit it, we often choose suppliers to show our loyalty to “our sides”. Those we choose make sure to signal which sides they are on, and we help to ensure that our associates see those signals, so they can credit us for loyalty. It matters less to us that these signals actually correlate with the things we claim that our side seeks to achieve, as long as they are widely seen as clearly marking folks as on our side relative to other sides. The more stable are sides and signals, the more security a supplier can gain by clearly picking a side.

Procedure – Often specialists create official procedures re how to do something, and rules saying what not to do along the way. Then suppliers can brag to customers that they follow good procedures, they may be required by regulators to do so, and may be punished by courts as negligent if they deviate. Civil servants, for example, are typically paid and promoted based on following official procedures, and on internal politics, not on rates or results. Divisions within private orgs also try to become silos evaluated via rules and procedures, not results. Suppliers tend to like being evaluated by stable rules and procedures that can be achieved with limited effort, as this ensures high job/supplier stability.

While all these methods have their place, the first one, results, seems the most solid and hardest to corrupt from the customers’ point of view. Yes there are obstacles to applying it widely, but such problems are often exaggerated to excuse the other methods. Suppliers would generally rather be evaluated via prestige, loyalty, and procedure, as once these are established they can usually look forward to long stable lucrative relationships, unthreatened by upstart competitors.

I want to find ways to tell people that we could pay for results far more than we now do. Yes, suppliers would resist such a switch, but we customers would get more of what we wanted.

GD Star Rating
loading...
Tagged as:

Vouch For Pandemic Passports

Car pollution is an externality. Via pollution, the behavior of some hurts others, an effect that injurers may not take into account unless encouraged to by norm, contract, liability, or regulation. However, as the pollution from one vehicle mixes with that from many others, liability is poorly suited to discourage this; it is too hard to identify which cars hurt you, and there are too many of them. It seems to work better use regulations regarding car design and maintenance to limit the pollution emitted per mile driven, and to tax those miles driven.

Assault is also an externality; you can hurt someone by punching them. But in contrast to pollution, regulation is poorly suited to assault. We could require everyone to wear boxing globes and headgear, and we might ban insults and alcohol consumption, or perhaps even all socializing. But such regulations would go too far in restricting useful behavior. It works better to just hold liable those who punch others, via tort or criminal law. Yes, to discourage assault in this way, we must hold (or at least threaten to hold) expensive trials for each assault. But that still seems far cheaper than regulatory solutions.

These two examples illustrate a well-known tradeoff in choosing between (strict) liability and regulation. On the one hand, making people pay damages when they hurt others encourages them to take such harms into account, while also letting their behavior flexibly adapt to other context. On the other hand, regulation lets us avoid expensive court trials that require victims to prove who hurt who when where and how much. Though regulation induces more uniform behavior that is less well adapted to circumstances, it works acceptably well in many cases, like auto pollution, even if less well in others, like assault. (The mixed solution of negligence liability is discussed below.)

In our current pandemic, the main externality is infection, whereby one person exposes another to the virus. Conventional public health wisdom says to discourage infection via regulation: tell everyone when to get tested and isolated, and make them tell you who they met when and where. Tell them who can leave home when and for what reasons, and what they must wear out there. However, as we are all now experiencing first hand, not only are such changes to our usual behaviors quite expensive, such rules can also induce far from optimal behavior.

Recent pandemic rules have banned bike riding, but not cars or long walks. You can take only one exercise trip per day, but there’s no limit on how long. Members of a big home can all meet in their yard together, but members of two small adjacent homes may not meet in one of their yards. You can’t go meet distant friends, even if they only ever meet you. All parks are closed regardless of how densely people would be in there. The same rules were set in dense cities and in sparse rural areas. Alcohol store workers are deemed critical, even though alcohol can be mailed, but not auto repair, which cannot be mailed. Six feet is declared the safe distance, regardless of how long we stay near, if we wear masks, if we are outdoors, or which way the air is moving. Workplaces are closed regardless of the number of workers, how closely they interact, or how many other contacts each of them have. The same rules apply to all regardless of age or other illness. You may have to wear a mask, but it doesn’t have to be a good one.

Imagine that we instead used legal (strict) liability to make as many of us as possible expect to suffer personally and directly from infecting others, and to suffer more-so the worse their symptoms. In this scenario, such people would try to take all these factors and more into account in choosing their actions. For actions that risk infecting others, they would consider not only on how important such acts are to them, but also on how likely they are personally to be infected now, how vulnerable each other person they come near might be to suffering from an infection, how vigorously their activity moves the air near them, where such air currents are likely to go, how well different kinds of masks hinder infected air, and so on. If allowed, they might even choose variolation.

Of course, for the purpose of protecting ourselves from getting infected by others, we already have substantial incentives to attend to such factors. The problem is that simple regulations don’t give us good incentives to attend to these factors for the purpose of preventing us from infecting others. With regulations, we have incentives to follow the letter of the law, but not its spirit. So we don’t do enough in some ways, and yet do too much in others. But if liability could make us care about infecting others as well as ourselves, then it might simultaneously reduce both infections and the economic and social disruptions caused by lockdowns. With strong and clear enough liability incentives, we wouldn’t need regulations; we could just let people choose when and how to work, shop, travel, etc.

But is it feasible to use liability to discourage infections? Yes, if we can satisfy two conditions: (1) most people are actually able to pay for damages if they are successfully sued for infecting others, and (2) enough of those who infect others are actually and successfully sued, and so made to pay.

On the first condition, ensuring that people can pay damages if they are found guilty, it is sufficient to require people who mix with others to buy infection liability insurance, similar to how we now require car drivers to get accident liability insurance. That is, to get a “pandemic passport” to excuse you from a strong lockdown, you must get an insurance company to guarantee that you will pay damages if you are shown to have infected someone. In a sense they “vouch” for you, and so are your “voucher”. The more types of voucher-client contract terms we are willing to enforce, the more levers vouchers gain to reduce risks.

The premiums for such insurance will be low if you can convince a voucher that you have already recovered from the virus, and so are relatively immune, or that you will leave your lockdown only rarely, to safe destinations. Otherwise, a voucher may require you to install an app on your phone to track your movements, or they may spot check your claims that you have sufficient supply of good masks that you use reliably when you leave home.

Okay, but what about the second condition, that enough infectors are actually made to pay? For this we need enough data to be collected on both sides, the infector and the infected, so that one can frequently enough match the two, to conclude that this person likely infected that one at this location at this time.

Now, we don’t need to be always absolutely sure of who infected who. In ordinary civil trials, the standard is a “preponderance of the evidence”; courts need only be 51% or more sure to convict the defendant. And sometimes we add on extra “punitive” damages, up to four ties as large as basic damages, often to compensate for a lower chance of catching offenders. So if we can find evidence to convince a court at the 51% or better standard for only one fifth of offenders, but we can add four times punitive damages, then offenders who do not know if they will be caught still expect to on average to pay near the basic damage amount.

Okay, but we still need to collect enough info to see who infected who at least one fifth of the time. Is this feasible? Well it is clearly quite feasible early in a pandemic, when few have been infected. Early on, if the times and places, i.e., space-time path, consistent with you being infected then and there overlap with the space-time path when someone else was likely infectious, then it was most likely their fault. This is the “contact trace” process usually recommended by public health workers early in a pandemic.

The problem gets harder later in a pandemic, when your infected path may overlap with the infectious paths of many others. Here it might be possible to use info on which virus strain you and they had to narrow the field. But even so there may still be several consistent candidates. In this case it seems reasonable to divide the liability over all of them, perhaps in proportion to the size of the path overlap. For the purpose of creating incentives to avoid infecting others, it isn’t that important to know later who exactly infected who when.

But yes, we still need info on who was infected and infectious where and when, perhaps supplemented by data on who had what virus strains. How can we get this info? People who might get infected have incentives to collect info on their path, to help them sue if infected. But people who might infect others would seem to want to erase such info, to keep them from being sued. I’ve recently outlined a more general approach to induce the collection of info sufficiently likely to be useful in later lawsuits. But for this essay, I’ll just propose that collecting key info be another condition required to get a pandemic passport, with violations punished by fines also guaranteed by your voucher.

Let me also note that yes, legal liability doesn’t work to discourage harms if typical harms get so small that people wouldn’t bother to sue to recover damages. In this case we could use a random lottery approach to dramatically lower the average cost of suing.

So let’s put this all together. You must stay at home, locked down, unless you get a “pandemic passport”, in which case you can go where you want when, to meet anyone. To get such a passport, you must get someone to vouch for you. They guarantee that you will pay should someone successfully sue you for infecting them, if you agree to their terms of premiums, behavior, monitoring, punishment, and co-liability. Defendants who pay damages may have to pay extra, to compensate for most infectors not getting caught in this way. When several infector candidates are consistent with the data, they can divide the damages. And for low damage levels, a random lottery approach can lower court costs.

To get and keep a passport, your voucher also guarantees that you will collect info that can help others to show that you infected them, but which can also help you to sue others if they infect you, and win you bounties via showing that others did not collect required info. For example, perhaps you must track your movements in space and time, regularly record some symptoms like body temperature, and also save regular spit samples. This info is available to be subpoenaed by those who can show sufficient reason to suspect that you infected them. Such info seems sufficient to catch enough infectors.

And by catching a sufficient fraction of infectors who then actually pay on average for the harms that they cause by infecting, (strict) legal liability can give sufficient incentives to individuals to avoid infecting others. If so, we don’t need crude lockdown regulations telling people what to do when and how; individuals can instead more flexibly adapt to details of their context in deciding when and where to work, shop, travel etc. Yes, voucher rules would not let them do such things as freely as they would in the absence of a pandemic. But behavior would be more free and impose lower economic costs than under crude regulations which similarly suppress the pandemic spread.

Note that today the most common form of legal liability is actually negligence, which we can see as a mixed form between simple regulation and simple strict liability. With negligence, the court judges if your behavior has been consistent with good behavior standards, which are essentially behavior regulations. But you are only punished for violating these regulations in situations where your behavior contributed to the harm of a particular person. Today courts tend to limit strict liability to cases where courts find it hard to define or observe good behavior details, such as using explosives, keeping a pet tiger, or making complex product design choices. As courts find it harder to define and observe good behavior in a new pandemic, strict liability seems better suited to this case.

Note also that none of this requires employers to be liable for their infected employees. Someone who is sued for infecting others may turn around and blame their employer for pushing them into situations that cause them to infect others. Employer-employee contract could usefully address such issues.

GD Star Rating
loading...
Tagged as: , , ,

Subpoena Futures

A subpoena … is a writ issued by a government agency, most often a court, to compel testimony by a witness or production of evidence under a penalty for failure. … party being subpoenaed has the right to object to the issuance of the subpoena, if it is for an improper purpose, such as subpoenaing records that have no relevance to the proceedings, or subpoenaing persons who would have no evidence to present, or subpoenaing records or testimony that is confidential or privileged. (More)

Parties may obtain discovery regarding any nonprivileged matter that is relevant to any party’s claim or defense and proportional to the needs of the case, considering the importance of the issues at stake in the action, the amount in controversy, the parties’ relative access to relevant information, the parties’ resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit. (More)

Exceptions are quite limited: self-incrimination, illegally-obtained info, and privileges of spouses, priests, doctors, diplomats, and lawyers. The remarkable fact is that the law has little general respect for privacy. Unless you can invoke one of these specific privileges, you must publicly report to the court any info that it thinks sufficiently relevant to a current court case. You simply have no general right to or expectation of privacy re stuff a court wants to know. Courts don’t even compensate you for your costs to collect evidence or appear to testify.

And yet. Consider what I wrote March 5:

The straightforward legal remedy for [pandemic] externalities is to let people sue others for infecting them. In the past this remedy has seemed inadequate for two reasons:

1. It has often been expensive and hard to learn and prove who infected who, and
2. … most folks just can’t pay large legal debts.
The vouching system directly solves (2), … And the key to (1) is ensuring that the right info is collected and saved.

First, consider some new rules that would limit people’s freedoms in some ways. Imagine people were required to keep an RFID tag (or visible QR code) on their person when not at home, and also to save a sample of their spit or skin once a week? Then phones could remember a history of the tags of people near that phone, and lawsuits could subpoena to get surveillance records of possible infection events, and to see if spit/skin samples on nearby dates contain a particular pathogen, and its genetic code if present. We might also adopt a gambled lawsuit system to make it easier to sue for small harms. (More)

Here, to help law deal with pandemics, I was tempted to propose specific rules re info that people must collect and preserve. Yet if courts can get any info they think relevant, why is there ever a problem with courts lacking info to deal with key harms, such as pandemic infection?

The answer is that current law allows a huge exception to its subpoena power. Courts can force you to reveal info that you have already collected, on paper, a computer, in your head, or in your physical objects. But you usually have no obligation to collect and save info now that the court might want later. As a result, many people and orgs go out of their way to not save incriminating info. For example, firms do key discussions verbally, not recorded, rather than via email. Thus you have no obligation to save spit samples or detailed records of where your phone goes, to help with future pandemic infection lawsuits.

This seems a huge and inconsistent loophole. I could understand if the law wanted to respect a more general right to privacy. Then the court might weigh the value of some info in helping court cases against the social harm from forcing its publication via a subpoena. As a result, it might sometimes block a subpoena even when the info collected would be relevant to a court case.

But I can’t see a reason to eagerly insist on access to info that seems relevant to a court case, and yet put no effort into inducing people to collect and preserve such info beforehand. So I propose that we create a legal process by which legal judgements are made on, if collected and saved, how likely some info would be to be subpoenaed, and how valuable it would be in that case.

When info would be valuable enough if collected and saved, then the court should require this. I don’t have a strong opinion on who exactly should bring a suit asking that such info be saved, or who should represent the many who would have to save that info. But one obvious system that occurs to me is to just have courts usually make ex post estimates of info value by the end of each court case, and then use “subpoena futures” prediction markets to make an estimate of that value ahead of time. (And make it legal and cheap to start such markets.)

So, if a subpoena futures market on a type of info estimates its expected court value to be above a standard threshold, then by law that info must be collected and saved. These prediction markets needn’t be huge in number, if they could estimate the average value of such info collect over a large group, which would then justify requiring that entire group collect the info. Such as everyone in an area who might infect others with a pandemic. If some subgroup wanted to claim that such info wasn’t less valuable regarding them, and so they should be excused, why they’d have to create different prediction markets to justify their different estimates.

For example, when a pandemic appears, if those who might infect others are likely vouched, then those who might be infected would want to require that first group to collect and save info that could be used later to prove who infected who. So they’d create prediction markets on the likely court value of spit samples and phone location records, and use market estimates to get courts to require the collection of that info.

Compared to my prior suggestion of just having the law directly require that such info be collected, this subpoena futures approach seems more flexible and general. What other harms that we do each other could be better addressed by lawsuits if we could require that relevant info be collected and saved?

(Btw, courts need not estimate info value in money terms. They might instead express the value of each piece of info in terms of its multiple of a “min info unit”, i.e., the value of info where they’d be just on the border of allowing it to be subpoenaed for a particular case.)

Added 7a: As mentioned in this comment, we now have this related legal concept:

Spoliation of evidence is the intentional, reckless, or negligent withholding, hiding, altering, fabricating, or destroying of evidence relevant to a legal proceeding …The spoliation inference is a negative evidentiary inference that a finder of fact can draw from a party’s destruction of a document or thing that is relevant to an ongoing or reasonably foreseeable civil or criminal proceeding.

My proposal can be seen as expanding this concept to allow a much weaker standard of “foreseeable”. And instead of allowing a presumption at trial, we just require the evidence to actually be collected.

GD Star Rating
loading...
Tagged as: , , , ,

What Can Money Buy Directly?

Can money buy oranges? Well obviously, in an indirect sense. With money, you could travel to a place where you’ve heard oranges grow wild, search to find such a plant in the wild, dig it up and try to ship it home, see if it you can make it thrive there, and if it does, take some oranges as your reward. This might work, but success depends not just on the money you pay; it also depends much more on your effort, abilities, and other context. In principle, you might be able to execute this plan without any money, but typically more money will make such a plan a bit easier. So, yes, in this weak sense, you can “buy” oranges with money.

At an ordinary grocery store, however, you can buy oranges much more directly. You go to the produce section, look for the orange color, walk to the pile of oranges, take as many as you want, and pay the price per orange at the register. Or at a full service grocery, you might just say “six oranges please” and a grocer would go find and bag them for you. Online, you might just type in “orange”, enter “6” for quantity, and click “buy”.

These ways to buy oranges are usually pretty reliable even for an ordinary person who knows little about oranges. Using these methods, the number of oranges you get depends mainly on how much money you are willing to pay, and much less on other context. This is what I mean by buying something “directly.” And so regarding the oft-asked question “what can money buy?”, a more interesting version of this question is “What can money buy relatively directly.”

As more money makes most any plan a bit easier to achieve, the many long lists one can find of “things money can’t buy” are in one sense obviously wrong; money helps with most of them. And if they just mean that money can’t guarantee the max level of each thing, that’s obvious, but trivial, as pretty much nothing guarantees that. You can’t even guarantee you’ll get oranges if you order them from a grocery. And if that is the meaning, why pick on money, relative to anything else that might greatly but imperfectly help you get things?

Perhaps what people mean is that money isn’t the main factor that determines if you succeed with such things; money can be a distraction from more important issues. But if so, that seems to claim that you can’t buy such things directly. Which then raises the key question: for what kinds of things can the money you pay be a strong factor in determining how much of it you get? That is, what can money buy directly?

In my last post, I talked about how one can buy higher wages, via a job agent. I wasn’t saying that there are complex and subtle ways to spend money to help your career, ways that could work if only you were clever and skilled enough to understand and apply them. I was instead saying that there is a simple direct way to do this, one most anyone can understand: hire an agent (and anti-agent). That method doesn’t guarantee you any particular wage, but it does let you control how much you pay per wage increase.

In fact, I’ll go further now, and say that there seem to be ways to measure most anything, and as a result we can buy most any measured thing relatively simply and directly. That is, via a simple method that most anyone can come to understand, you can just point to what you want, put cash on the table, and then lose cash in proportion to how much you get of what you want. And the relation is substantially causal; paying more can cause you to get more, even when you have little relevant ability or understanding.

In the academic literature, this method is called an “incentive contract”. You find a way to measure the outcome you want, you offer to give someone access to levers by which they can plausibly influence this outcome, and you contract to pay them more cash the higher is this measure. You might also hold auctions or competitions to see who is best to put into this role.

We have a great many real examples today, and in history, of oft-used incentive contracts. Artists and athletes have agents paid a fraction of their earnings. Line workers are paid “piece rates” per how many items they assemble, or tomatoes they pick. Sales workers are paid commissions, per how many items they sell. Hedge fund managers are paid more if their fund makes higher returns. Lawyers on contingency fees are paid a fraction of court awarded damages. Firm managers are paid in stocks and options which rise in value when firm stock prices rise. Athletes are paid bonuses for individual and team success. Construction contractors are paid more if their work is completed by a deadline. Ships carrying convicts to Australia were paid on the number who arrived alive (which worked much better than the number who started out alive.)

Are the applications we’ve seen the only feasible ones, or could many more yet be developed? Consider beauty. Some say beauty can’t be measured, as it is “in the eye of the beholder”. But if you ask many people to rate someone’s beauty, their ratings are correlated. So imagine taking many standardized pictures and video of a client, across across their usual range of clothes and environments, and then paying many independent observers to rate their attractiveness. Do this at the start to get an initial value, and plan to do it again in, say, six months. A client might pay a beauty agent based on the change in this measure.

Potential beauty agents could bid by offering how much money they want to be paid per unit of increased beauty, how much they would pay up front to gain this role, and which particular beauty decisions they want to control, rather than merely advise, at least until the second measurement. There are probably clever ways to use auctions or decision markets to select from among these bids, but such details need not concern us now.

Yes, it would be a problem if a beauty agent could corrupt beauty measurements, or exploit their biases. But if such effects are modest, expert beauty agents can likely substantially increase a client’s beauty, relative to that client’s amateur efforts. Consider that movies don’t usually let actors pick their own clothes and hairstyle to look good in each movie; beauty experts instead make those choices. Yes, clients may care less about beauty as seen by average people, and more as seen by particular communities. But measuring such local versions of beauty should only cost a bit more.

Now consider happiness. If happiness were an entirely internal mental state that never influenced our external appearances, well then yes it would be hard to measure happiness. At least until we can better read brains. But most humans leak their feelings in many ways. So a 24/7 audio/video feed of a person, especially their facial expression and tone of voice, perhaps augmented by watch-based measures of heart rates, etc., seems plenty sufficient. Especially if processed via self and other reports, rather than artificially. Happiness could be measured pretty accurately from such things, especially for a client who wants it to be measurable, so that they can hire an agent to increase their happiness. (And especially as things like smiles and laughter probably evolved to signal happy internal states.)

A happiness agent is given control over some elements of a client’s life, and can advise on others. Especially on which other agents to hire for beauty, health, career, etc. Happiness agents pay some initial fee to gain this role, and then they are paid in proportion to the client’s measured happiness. Such agents might be big firms that combine many kinds of happiness expertise, and who can take big risks. If there are things that an expert can learn about how to be happy, things an ordinary amateur doesn’t know, then there is likely substantial scope for using agents to directly buy happiness. If so, money can buy happiness, directly.

Well this is enough for one blog post. The key conclusion: it looks feasible to much more directly buy many things we care greatly about, including beauty, happiness, health, career success, popularity, and status. Yes it would be work to set up systems to measure such things, work that could not be recouped for just from one client. But the prospect of many millions of clients should be quite sufficient.

One key question remains: why hasn’t there been more interest in such possibilities? Are these new innovations that could spread widely, or are they blocked by key fundamental permanent obstacles not yet considered in the above discussion?

Added 20Apr: Most seem to actually be comforted by the fact that it can be hard to buy things with money, and seem uninterested in finding ways to make it easier to buy things with money. I suspect they feel that better methods of this sort would give a relative advantage to people with more money, who they see as other people. While everyone could benefit from better ways to buy things with money, that matters little to those focused on relative status.

GD Star Rating
loading...
Tagged as: , ,

Why Not More Job Agents?

Professional agents take substantial fractions of client wages: 3-10% in sports,10-15% in music, 10-20% in acting, and 15% for writers. Somewhat relatedly, job recruiters take 10-30% of a first year salary, and home realtors take 2-3% of home sales.

The logic is simple: you might be good at your job, but you can’t be the best at everything related to your career. There is room to be helped by people or organizations who specialize in advising, presenting, evaluating, matching, and networking for workers with your sort of career. Such help can be useful not only when you seek to change jobs, or get promoted within an organization, but at all points in your career. Even at the start, when you are deciding where to get trained in what.

The agency relation works smoothest with a clear division of labor; your tasks and their tasks. But there is also room for collaboration on shared tasks. Such as by their giving you advice on choices that are ultimately up to you.

The best agents are usually paid via an “incentive contact”, wherein they get paid a fraction of what clients get paid. This seems a big improvement on how we usually pay tutors, advisors, mentors, personal coaches, or inclined-to-advise friends and family. When you instead pay someone by the hour, or by favors traded, their interests are less clearly aligned with yours. Yes, you might judge them based on reputations or track records. But track records are rarely visible, and reputations are often only loosely related to help. You may not be much better at judging if their help and advice is good than you would be at just trying to do those things yourself.

In contrast, paying your agent a fraction of your earnings more clearly aligns their interests with yours, and also makes it easier to choose an agent. By agreeing to be your agent, someone credibly signals confidence in their and your abilities, and that you can work together. This is similar to how most lawyers will happily take your case if you pay them by the hour, but will be much picker if you ask them to be paid a contingency fee (i.e., % of the verdict). Also, all else equal, the lower the fraction of earnings they will take to do the same tasks, the higher their estimate of your earnings given their help.

While most people informally collect some career advisors and mentors, it seems something of a puzzle that more people don’t have career agents. You might claim that agents just can’t help most careers, but that seems just wrong. Maybe they don’t help a lot, but surely they could charge a little do a little. You might note that most of us have goals other than making money, but that is also true for most who have agents; the incentive contract method doesn’t need to be perfect, it just needs to be better than other methods, such as paying by the hour.

Yes, if your career is very risky, with a small chance of huge success, then being your agent is risky too. But each agent can have many clients, and agents can band together into larger firms to spread risk. As a result, risk-aversion need not greatly limit agent incentive contracts.

Now perhaps you object that an agent just couldn’t help enough to deserve 10%, or even 5%, of most salaries. But you can use an initial signing fee to separate an agent’s incentive from their net compensation. For example, assume that your and your agent’s fractional incentives must add to 100%, and that for incentive purposes the most efficient fractions are 70% for you and 30% for your agent. But also assume that the cost to an agent to put in that optimal effort is equivalent to only 10% of your salary. In this case, a better contract is for the agent to pay you a 20% up front “signing fee” for the right to be your agent and then later get 30% of your earnings. In this way your agent will on net get paid 10% of your earnings, and yet have a 30% stake in your income to give them a strong incentives.

Yes, for short term contracts such incentives only make agents work hard in ways that can produce short term gains. And we might rightly be wary of committing early on to one agent for our whole life. A simple solution here is to have each new short-term agent pay their up front signing fee to your previous agent, instead of to you. In this way each of your agents has a long term incentive about you, even if they may not always stay your agent. Your first agent may then pay you an especially large signing fee, which you might use to help pay for early career education or training (or you could paying for those part of their tasks).

To avoid the problem that a stronger incentive for your agent comes at the cost of a weaker incentive for you, it is actually possible to have the sum of your and your agent’s wage fractions add up to more than 100%. All you have to do is find a third party “anti-agent” willing to accept the remaining incentive. For example, you could get 100% and your agent get 50% of your earnings, if your anti-agent takes a -50% stake. You’d pay your anti-agent an up-front signing fee, and then they’d later pay your agent 50% of your earnings, while you just kept your earnings.

The main problem with an anti-agent is that they’d have an incentive to hurt your career. So you’d want to make sure to pick anti-agents only from organizations who are set up so that it is hard for them to hurt you. Perhaps (1) they are only your anti-agent for a short period, (2) you use cryptography so they don’t know who exactly you are, (3) they are headquartered far from where you live, and (4) they are just a financial holding firm, without employees able to do things to help the firm.

It wouldn’t be terrible to use auctions (or decision markets) to pick your agents and anti-agents, and their fees, from qualified candidates. For example, you might initially pick optimal agent and anti-agent fractions, and identities, via an initial auction for the max net singing fee given to you. You could probably use many criteria to define who is qualified, though your agents would be wary of your later using arbitrary conditions to extort the signing fees that agents were supposed to be paid. So you would have to agree on some limits to changes in qualification conditions.

If agents expect that you will may make choices that cut your earnings, they would likely pay more for agent contracts that put those choices within their sphere of control. Such as the ability to format your resume, or perhaps to veto job choices. So you’d want to think carefully about which choices agents get full control over, and which they can only advise you on. And current laws may limit these contracts in many ways.

Think about it this way: with a good initial auction to choose an agent, if the help of an agent isn’t actually on average worth its cost, then the winning bid should be someone who just pays you up front for the present financial value of a fraction of your future income. They won’t include an amount in their bid to cover costs to help you, as they don’t plan to try to help. If that’s the winner, accept them, and walk away wiser for knowing that you are better off without an agent trying to help you.

With all these options available to help set up a productive agency relation, I am honestly puzzled about why more people don’t seem interested in having agents. Especially as it tends to be the more prestigious and successful people today who have agents. Why don’t people get an agent, just to brag that they have one?

(Note that I’m not making any assumptions about how the roles of “agent” are organized or divided. They could be provided by individuals or by large firms, and could either be unified into one role or divided up into many differing roles.)

Added 19Apr: Many say they’d rather pay an agent a percentage of earnings over some reference earnings. But that’s mathematically equivalent to an agent who pays a signing fee and then gets a percentage of all earnings.

GD Star Rating
loading...
Tagged as: , ,

Vouching Fights Pandemics

As I’ve pitched vouching as a general solution to both law and medicine, the looming coronavirus pandemic offers a good and challenging concrete test; how well could vouching handle that?

If you recall, under a law vouching system, each person is required to get a voucher who stands ready to cover them for any large legal liability, including fines as punishment for crimes. Under a medical vouching system, each person gets a voucher to pay for all their medical treatments, and also to pay large amounts to a third party when that person becomes disabled, in pain, or dead. Voucher-client contracts can specific physical punishments like torture or jail, co-liability with associates, and limits on freedoms, such as re travel, privacy, or risky behaviors. 

Regarding a looming pandemic, your voucher would know that it must pay for your medical treatment, your lost salary if you stop working, and large fines if you die or get hurt. So it would offer large premium discounts to gain powers to limit your travel and contacts, and to penetrate your privacy enough to see what contagion risks you might incur. And it would have good incentives to make risky medical choices expertly, such as if to try an experimental treatment, or to accept early deliberate exposure. 

When you live with others who you might infect, or who might infect you, you’d probably also be offered premium discounts to let the same voucher cover all of you together. But there would remain key externalities, i.e., risks of infecting or being infected by others who are not covered by the same voucher.

The straightforward legal remedy for such externalities is to let people sue others for infecting them. In the past this remedy has seemed inadequate for two reasons: 

  1. It has often been expensive and hard to learn and prove who infected who, and
  2. Ever since we stopped holding family members liable for each other, and selling debtors into slavery, most folks just can’t pay large legal debts.

The vouching system directly solves (2), as everyone has a voucher who can pay lots. And the key to (1) is ensuring that the right info is collected and saved.

First, consider some new rules that would limit people’s freedoms in some ways. Imagine people were required to keep an RFID tag (or visible QR code) on their person when not at home, and also to save a sample of their spit or skin once a week? Then phones could remember a history of the tags of people near that phone, and lawsuits could subpoena to get surveillance records of possible infection events, and to see if spit/skin samples on nearby dates contain a particular pathogen, and its genetic code if present. We might also adopt a gambled lawsuit system to make it easier to sue for small harms.

Together these changes could make it feasible to, when you discovered you had been infected, sue those who likely infected you. First, your voucher could collaborate with vouchers of others who were infected nearby in space and time, by a pathogen with a similar code. By combining their tag records and local surveillance records, this group of vouchers could collect a set of candidates of who might plausibly have infected you when and where. 

(Yes, collaboration gains from voucher groups might give vouchers more market power, but not too much, as this can work okay even when there are many competing voucher groups.)

You could then sue all these possible infectors via gambled lawsuits. For the winning lawsuits, your voucher could subpoena their split/skin to see if their pathogen codes match the code of the pathogen that infected you. When a match was found, a lawsuit could proceed, unless they settled out of court. Sharing verdict and settlement info with collaborating vouchers could make it easier for them to figure out who to sue.  

Okay, yes, there is the issue of who would agree to keep RFID tags and sufficient spit/skin samples, if this weren’t required by law. I’ve proposed that the amount awarded in a lawsuit be corrected for how the chances of catching someone varies with the freedoms they keep. Such chances would be estimated by prediction markets. The lower the estimated chance of catching a particular harm for a given set of freedoms, then the higher would be the award amount if they are caught. 

So if, given the choice, some people choose not to use RFID tags or keep spit/skin samples, they may be harder to catch, but they would pay more when they do. (Which is part of why most might choose less privacy.) As a result, clients and their vouchers will know that on average they will pay for the full cost of infecting others. Which could be huge amounts if they infect many others with deadly pathogens. Which would push vouchers to work to ensure that their clients take sufficient care to avoid that. 

And that’s my concept. During the early stages of a pandemic, a system of law/med vouchers would have incentives to try the sort of aggressive case tracing that public health professionals now try. And if such professionals existed, they could collaborate with vouchers. Once the pandemic escaped containment, this vouching system would encourage people to isolate themselves to avoid infecting others, and to avoid being infected. Their freedoms of travel and privacy would become more limited, more like the limits that an aggressive government might impose. 

But exceptions would be allowed when other costs loomed larger, just as economic efficiency demands. Compared to a centralized aggressive government, a voucher system could much more easily and flexibly take into account individual differences in inclinations, vulnerability, and preferences. The choice of freedoms would be made more practical and local, and less symbol.

With vouchers and lawsuits for infections working well to get people to internalize the infection externalities, pandemics might be limited and contained at nearly the level that a cost-benefit analysis would suggest. 

Added 07Mar: Early in a pandemic it is easier to trace who infected you, and it would make sense to let you sue someone who infected you not only for the damages you suffered, but also for the damages you had to pay others who you infected. This could create very large incentives to contain pandemics early.

Later in a pandemic people sued might reasonably argue that they should only have to pay for the harm from someone being infected earlier than they would otherwise have been, which might be no harm at all during a period before the peak when medical resources are becoming spread increasingly thin.

Added 10Mar: If later in an infection it becomes too hard to trace who infected who, even with the above reforms, then it might make sense to have more general crime-law-based rules limiting social contact. Vouching can also do well at enforcing such rules.

Added 20Apr: See my more flexible and general approach to requiring that info be collected and saved. Also, if cases are common where you can narrow an infection down to 1 of 5 sources, but can’t prove which one, it makes sense to make them each pay 20% of the damages. This way we don’t need to be >50% confident of each particular infection link.

GD Star Rating
loading...
Tagged as: , , , ,