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Thursday, August 11, 2005

Assurance contracts

Assurance contracts - Wikipedia, the free encyclopedia:

Assurance contracts operate as follows:

In a binding way, members of a group pledge to contribute to action A if at least N-1 other members also make the same pledge. If N members sign the pledge (perhaps by a certain expiration date), the action is taken. If the quorum is not reached, the parties are not obligated to carry through on the action.

The binding mechanism may be a contract enforced by a government, a contract enforced by a private organization (e.g. a mediator, a protection agency in an anarcho-capitalist society, etc.), an escrow organization (in such cases, the "binding contract" is "signed" by depositing funds in advance, which are later either disbursed according to the contract, or refunded), etc.

An interesting idea.

By the way, I'll be on vacation until Sunday the 21st. Don't expect any post before this date.

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