Talk:Assurance contract

Unclear wording

<< In a meta-game, incentivising other entrepreneurs to enter the Dominant Assurance Contract market, driving down the cost disadvantage of Dominant Assurance Contracts verus Assurance Contracts. >>

Can anyone make this clear?

I think it is referring to how a lone entrepreneur in a Dominant Assurance contract makes out like a bandit (the "cost disadvantage" bit), which means that other entrepreneurs will want some of those profits. With multiple competing entpreneurs, profit margins (and henace total cost) should go down, making it a better deal for the people. I think. --Maru (talk) Contribs 04:27, 25 December 2005 (UTC)

I read this as: While Assurance contracts in general utilize the principals of Game Theory to create incentives for patronage and for production, the concept of a Dominant Assurance Contract leverages game theory on the additional level of allegedly providing incentive for producers to choose the Dominant form of assurance contract over the standard, "non-dominant" form. Or, put another way, Dominant Assurance Contracts were designed to be like Assurance Contracts, but with a modification that makes the practice so potentially lucrative (for all parties) that practitioners should have no reason to prefer a normal Assurance Contract. Jesset77 (talk) 01:36, 25 July 2009 (UTC)

I took "dominant" to mean that participation, as a strategy, dominates (is always more advantageous than) non-participation – rather than that a DAC dominates other ACs, since one can't be sure that someone won't conceive another kind of AC that dominates this DAC. —Tamfang (talk) 03:32, 27 July 2009 (UTC)

Unclear article

The article begins saying assurance contracts are a 'financial technology', which suggests to me they are actually existing devices in financial markets. But then the rest is a rough theoretical sketch, which doesn't make things much clearer.

Can someone explain - is this talking about actual financial market practices? If so: examples, history ...?

Or is this a purely theoretical concept. If so - whose, where, sources ...?Bengalski 22:57, 2 January 2006 (UTC)

Merge with Dominant Assurance Contract??

What happened to the content at

http://en.wikipedia.org/wiki/Dominant_assurance_contract

?!?!

Christ, it's not in deletionpedia or archive.org, but I seem to remember there being more content than what's here. Will this not stop until Wikipedia is in ruins? beefman (talk) 07:28, 18 January 2009 (UTC)

The edit history of Dominant assurance contract says that it was created in September 2005 as a redirect to Assurance contracts and altered in July 2008 to redirect to Assurance contract. When do you remember seeing content there? —Tamfang (talk) 02:43, 19 January 2009 (UTC)

Examples?

I really think that sites like Kickstarter should be mentioned. Kickstarter match this description very well: Somebody offers to do something, sets a date, sets a amount of money to be donated and may also offer specific things to those who have contributed a certain amount (let's say a signed CD to people who contributed over $50, as example), and if the amount is not met by the date that was set, the contributions are refunded. AFAIK there's no requirement that the result should be publicly available, it could be a subscription service where all the contributors automatically gets a subscription. Does it deserve to be mentioned in the article? 109.58.65.59 (talk) 11:44, 19 September 2010 (UTC)

Looking at Kickstarter, it seems like a great example (and surprisingly successful). I agree that it should be added. --Gwern (contribs) 17:05 10 October 2010 (GMT)

Tabarrok’s fallacy should be mentioned:

Tabarrok concludes, that his model would motivate everyone to contribute.
But this assumption has no basis, as it does not follow from the model.
In fact, one gets actively rewarded for making the project fail.

Instead of a sane model, it reminds one of a typical “private equity” company like Bain Capital, which deliberately buys, wears down, and then kills off companies because of a guaranteed reward (even) in case of bankruptcy.
This abusive vampirist relationship is demonstrably not a basis for a working market, and in fact should be highly illegal, analogous to pimping and murder of slave prostitutes.

– 92.72.231.17 (talk) 11:41, 25 June 2013 (UTC)

You make a lot of claims. Perhaps you could justify or prove them, with respect to Reliable Sources... --Gwern (contribs) 17:21 25 June 2013 (GMT)

How do assurance contracts relate to the free rider problem?

The intro states that assurance contracts provide a solution to the free rider problem. However, I was not able to understand how these are related from the description given in the article. It seems like the free rider problem still applies to public goods funded by assurance contracts, as rational actors may decide not to pledge in order to let others provide the funding. It seems like assurance contracts solve an entirely different problem, the risk of investing in something that requires a certain minimum amount of funding to get off the ground. The article needs to have an explanation, preferably sourced, of how the free rider problem relates to assurance contracts. 67.188.230.128 (talk) 06:53, 4 December 2014 (UTC)

As mentioned above, assurance contracts, unless some further argument can be made, seem to have nothing to do with solving the Free Rider problem mentioned, but are about people minimizing their risk in committing to some action only as part of some contingency - such as not committing money to buy a product from a new company until it's gotten enough funding from others that those products will be made Countwiki (talk) 15:49, 14 June 2017 (UTC)