Nice.  There is really no "right" or "wrong" response, so please keep 'em coming.

I figure many forum users know about this experiment or can easily see what it tries to test.  For those not versed in game theory and up for a spoiler, Wikipedia has an article¹ that explains what this is about, and what results were obtained in different cultures.  But if you intend to reply please do so before reading that page.

I think it would be interesting to have a chat about some implications of this experiment, but I'd rather allow some time for replies first.

For whatever it's worth, and knowing full well it's not the "rational" thing to do, I know I'd tell the greedy bastard to go #%@! himself.

Two perhaps interesting questions:

If you were in the position of the one who made the offer, what would you offer:

 a) to someone who you expect to know about game theory and this game in particular,
 b) to someone who you expect not to know about game theory and this game in particular.

in either case, you know nothing else about this other person.  Not even sex, race, nationality, etc.  Imagine it happens in some anonymous chat room (not #bitcoin-otc ).

[1] http://en.wikipedia.org/wiki/Ultimatum_game

@vuce:  Your analysis is flawless, and settles the game-theoretic interpretation of the problem.  Then again, this question isn't a riddle in game theory, nor necessarily about maximizing payoff, nor are you asked to take money as a representation of utility.  I think you understand that and mean what you say, but just to make sure: would you really take one cent if this actually happened tomorrow?

No,  that is not an option.

I read this interesting experiment from The Origin of Wealth, a book by Eric B. Beinhocker (paraphrased):

Imagine that a stranger proposes you and me the following deal.  She will give us 5,000$ if we can agree on how to split it.  It works like this: I choose a split and you don't get to negotiate it, you can only accept the deal (in which case each of us gets what I chose) or reject it (in which case neither of us gets anything).

After giving it a short thought, I propose that I get 4,990$ and you get 10$.

Would you accept the deal?

(I'm not asking what you think is the rational thing to do from either a selfish or political standpoint, but what would you actually do.)

I had read the thread, even participated a bit, even proposed rich sponsors as an option for the funding of medical research (especially when they, or their loved ones, were affected by disease --not ruling out philanthropy though).

I wasn't intending to put words in your mouth.  I was illustrating my disagreement with the stress you placed on (a) rich people and (b) taxes, in this context.  My point is that if you're the philanthropic type, you'll contribute, rich or not, within your possibilities.  If you can otherwise afford philanthropy, taxes will not change that, qualitatively.  You'll contribute less.  Some research will still get done.

If you mean that taxes will resent rich people out of causes they otherwise believe in... doesn't sound rational to me.  I don't think that's how philanthropically inclined people think either.  Sounds more like a cop out.

Maybe some rich people without much of a philanthropic inclination would be guilted into otherwise "giving back" if taxes didn't exist?  Makes sense to me.  Would that allow for more research than taxing them?  Not sure.

(I'm not discussing whether medical research would justify taxing.  Only the relative effectiveness of taxing vs trusting people to contribute on their own.)

And sorry if the tone came across as trying to ridicule your position.  Our cultural backgrounds are very different and I was amused (not in a paternalistic way, but in a "this is refreshing to hear" way) by the dissonance, hence the jocular tone.

Or even better: how many more billionaires would feel generous if the government gave them money instead?

You don't need to be a millionaire to donate money to a good cause either, do you?  If your point is that aggregation of resources makes efforts more effective or that Bill Gates and Warren Buffet will put the money to better use than your average NGO, nothing stops non-millionaires from donating to the Bill & Melinda Gates Foundation.

Not arguing for or against taxing here, but frankly, that kind of statement makes you sound like a hammer desperately looking for nails.


[Emphasis mine]

I suppose he pays way more than his secretary overall, via other kinds of taxes.  If not... well, problem solved?

Aren't Bill Gates and Warren Buffet paying taxes?

Two more things about IP:

 - By defending it is property, you're not just justifying the temporary monopoly that would be "needed" to derive a profit from research.  You can hold onto your property forever, pass it to your heirs indefinitely, and prevent anyone from ever using it.  Recognizing IP implies recognizing your right to prevent your new cure for Alzheimer from being rediscovered and/or used by anyone, ever.  Of course this is a pathological use, but if you deny its legitimacy, you are saying IP is something else than property.

 - The world where scientific and technological progress can only happen with the expectation of a monopoly, or even of direct profit from the discovery itself, is not the world we have lived in for centuries, and would indeed be a very sad world.  A medicine or treatment that cures a disease altogether is less profitable that one that makes it chronically treatable.  Medicines or treatments that are not patentable or otherwise less profitable get lobbied against so public authorities fail to promote them or regulate against them.

Besides private deals such as proposed by BitterTea, and besides philanthropy (a big one to ignore), I can think of another obvious driver for medical research in an IP-less world: rich people, and their relatives and loved ones, get sick too.  Microsoft cofounder Paul Allen invested in cancer research when he was diagnosed himself.

You can contend that only diseases common in the rich will be funded this way.   That is also true, to some extent, for the IP-driven big pharma research.  If it's not profitable to cure some disease that is killing millions in Africa, no research to that end will be funded by IP-driven ventures.

I have invented a neat new yoga posture.  I'll tell you for 50 bucks.  That is, 50 bucks each time you do it.  I'll send the police to your home if I catch you doing it without paying me. 

Information is real and useful, it's just not property.

You know that is not how IP works, right?

Yet the equivalent of those could conceivably be patentable in other disciplines.

And while I will support your work if I like it, I am not recognizing any such claim, much less accepting its enforcement.

The physical object is yours.  You can restrict access to it, and, for example, forbid anyone to enter your house with a camera.  But once you expose it in a museum with no such restrictions, for example, you have no business forbidding anyone from circulating pictures of it.  I don't think art history books are paying royalties to the artists in illustrations, or their families.

Nope, nope and nope.  Originality exists.  Voluntary alignment of objects may be meaningful and valuable.  It's just not property.  It's not something that can be taken from the author by the act of reproducing it.

I think you're mixing me up with someone else here?

My point here was that useful stuff gets created even without the financial incentive of IP laws.

In general, I'll be respectful with the intention of the creator.  That doesn't mean I recognize he has a right to dictate how his creations will be used (or not) once they have entered public circulation.

That is an arbitrary line to draw, and one that isn't that clear in IP laws.  Software patents do try and make properties out of ideas.  Luckily, their very absurdness is what keeps them from doing much damage.  Most companies keep patent portfolios defensively, knowing full well that practically nothing of value can be built without stepping on top of someone's IP.

So, coming back to the example to which you're apparently replying, you mean that if a website could reliably diagnose every disease that would be a step backwards?

I understand the value of specialization and intellectual work.  I contend the point that it needs rely on the ability to artificially restrict the dissemination of information.

We are still talking about intelectual property laws, right?

If so, this is patently false.  The doctor can charge me because paying him is immensely more practical and safe for me than educating myself in medicine in order to cure myself, not because such scientific and medical information is proprietary.  There is a natural opportunity cost here.  IP laws try and enforce artificial barriers to the dissemination of information to create scarcity.

Exactly: they greatly benefited from said research without the need to restrict anyone else's access to, or use of, the results.  That proves IP laws unnecessary.

Absolutely not.  I don't recognize your right to dictate what I do with the bits you discovered.  I certainly don't intend to try and tell others what they can not do with information.

Desirability doesn't make property.  Exclusion is needed too.  The very concept of property comes from the fact that some things are finite and so we both can't enjoy them at the same time.  So we must either fight for them or somehow agree on how to distribute them.  Information is not finite.

I pay for both, if I can afford it.  The first because it's a service; if I can't afford it, I do without it.  The second because I want to support the author and encourage him to produce more good stuff.  I will sometimes pay for books that are legally downloadable for free.  But if I can't afford the book, I'll download a copy with no remorse.  I'll buy one when I can.  Nobody is any better for me waiting to read the book until I got employed again, especially if the book helps make me more employable.

This is admittedly a contrived example.  I don't intend it to represent the general case of piracy.  I just mean it's in the domain of morals, not law.

More to the point, I don't recognize the author's, or anyone else's, "ownership" on the end product.  And I don't support laws that try to criminalize something like lending a book to a friend.  In the IP model, that's as much "stealing" as downloading it from a warez site, right?

You just provided excellent counterexamples to your thesis.  Mathematicians and philosophers don't make money by trying to own, and control the use of, theorems or philosophical constructs.  That's why you don't need to pay a royalty to the descendants of Pierre de Fermat and scores of other true geniuses for the use of cryptography and derived inventions, like BitCoin.  Nor you need to pay those of Adam Smith, Marx, or any of the Austrian economists for the use of it, even if some of their work could be proven to have been instrumental in inspiring BitCoin.

Do mathematicians "create" theorems?  What right would the descendants of Pierre de Fermat (or he himself, in his time) have to prevent you from rediscovering, say, Fermat's Little Theorem independently (such things happen in mathematics all the time), or from using it to prove other theorems or to invent new technologies, like public key cryptography?

One argument for patents is that the alternative would be secrecy.  A counterexample would be the RSA algorithm.  It was first "invented" by someone in some British secret agency and kept secret.  Not much later, a group of researchers discovered it independently and published it.  Now everyone can benefit from it.  I don't think their inventors regret the work they put into it.  Actually, I see absolutely nothing wrong with that.

When was the last time that anybody got rich by patenting a programming language?  Aren't these useful inventions?  Don't they get invented all the time?

In science and medicine it's not the rule either that progress comes from investments motivated by expectations to profit from restricting the use of information.  Your doctor doesn't get his money from trying to prevent others from using his "creations" (whatever this even means) without his permission.  The fruit of the application of his knowledge and intellect is an improvement in your health.  You (or someone) pay him for it because this application of knowledge is not easily reproducible.  If you could reliably heal yourself by checking a website and following simple instructions, doctors would have no business, and that wouldn't necessarily be a bad thing.  That talent would find something else useful to which apply itself.

In sum, mathematics, science, and medicine have progressed alright for centuries without anybody really needing to artificially restrict anybody else's use of information.  Information is variably hard to discover/produce, but, by nature, often trivial to reproduce.  You have no right to demand others to artificially renounce the benefits of this desirable property in order to protect a fundamentally unsound business plan.