Charity auctions are rational


I've given some thought in the past to how open source (and other works in the commons) may be funded. It turns out this can be done rationally (see RSPP). However until now i had not found a protocol that's simple to implement.

Here's one you can implement, trivially, ... on eBay.

The open source author auctions a series of items on eBay. These items have only small worth of themselves, but the money raised will pay for the author to work on their software. Suppose you are a buyer participating in this auction.

Perhaps every $2 raised will be worth $1 to you in terms of further work on the open source software (or some similar ratio). If so, you'll come out ahead if you "win" less than half of these auctions.

Once you've learned the behaviours of other bidders, you can set up a strategy that will achieve this. The strategy must be somewhat random, or other bidders will all just bid a teensy bit below what you do. It's an exercise in basic game theory.

The items auctioned are not all that important. They might be nothing more than a warm inner glow, but it's probably best to auction something of some small worth. One possibility would be to make coins, with a trademark stamped on their faces so that forging them would be illegal. Such coins would have value as indicators of social status, demonstrating that the bearer was (a) wealthy, and (b) a good citizen.