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Revised wording and phrasing

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dotmacro committed Jan 25, 2016
1 parent 59c82a7 commit 06ceb765747c684eab7770c1b9aae9e62e0da777
Showing with 13 additions and 19 deletions.
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# Design of Group Income

## Contribution Limits
## Contribution Caps

Members can set limits to the amount that they are willing to shoulder the burden (in addition to the fairness check between monetizers).
Members can set a cap on the amount that they are willing to contribute to the others' group income. This can provide predictability and stability for all members. The Contribution Cap does not apply to Income Streams lower than the basic income goal because they do not reach the contribution cusp.

**The contributor limit does not apply to members making less than the bucket amount.**
How the contribution limit relates to bucket sizes and the Fairness Check still remains to be sketched out.

How the contribution limit relates to bucket sizes and the fairness check still remains to be sketched out.
TBD: If someone with a large income stream *could* help fill a lot of buckets but chooses not to, then perhaps *their own* bucket should be smaller in size (i.e. they're not helping the group much, so the group shouldn't be helping them much, especially since they don't need the help as much as some of the other members).

TBD: If someone is making a lot and *could* help fill a lot of buckets but chooses not to, then perhaps *their own* bucket should be smaller in size (i.e. they're not helping the group much, so the group shouldn't be helping them much, especially since they don't need the help as much as some of the other members).
## Fairness Check Between Income Streams

## Fairness Check Between Monetizers
The Fairness Check is a necessary measure to ensure that Group Income is fair to all members and that individuals are willing to participate in the system. The Fairness Check prevents the unfairness that would otherwise naturally be created by the system simply based on timing of payments. In other words, without the Fairness Check, two equal Income Streams with different pay schedules would contribute different amounts to the group because earlier payments are more likely to go towards the group's basic income than payments at the end of the month. For example, in a group with five $100k/year Income Streams, the five Income Streams will equally split contributions to the group's basic income amount between themselves, regardless of payment schedules.

The Fairness Check is a necessary measure to ensure that Group Income works and that people are willing to participate in the system. It exists because unfairness would otherwise naturally be created by the system simply based on when people receive paychecks. In otherwords, without the fairness check, two monetizers that make equal amounts per month would be sharing the monetary burden of the group unequally if they received payment at different times.
The Fairness Check also ensures that the contribution of each Income Stream is weighted proportional to its size. The algorithm automatically keeps track of sets of Income Streams by tracking historical income, to ensure that new, ending, and variable Income Streams are all properly considered.

The algorithm automatically keeps track of sets of monetizers by tracking historical income.
If Income Stream "A" is $200k/year and Income Stream "B" $100k/year, then by default the Fairness Check ensures A makes a greater contribution towards the group's basic income than B, because A = 2B. The result is the same whether A and B were steady Income Streams throughout the year, or one began or ended mid-year.

In a group of 5 members with 2 monetizers and $1k BI, the two monetizers are weighted based on how much they make.
It's easier to see the Fairness Check in action by comparing two Income Streams, one of $200k/year and the other $20k/year. The $20k/year Income Stream should not be expected to split the contribution amount equally (e.g. each giving $8k), but rather proportionally. With the Fairness Check, the $200k/year Income Stream will contribute a substantially larger amount than the $20k/year Income Stream contributes, because $200k/year = 10 * $20k/year.

So if they make equal amounts then the fairness check makes sure that they are contributing to the group equally (for the moment, we're imagining a situation where contributions-limits are not enabled). In a 10-month year, two monetizers making $100k/year each, will need to fill 3 buckets (other than theirs) and split that amount between themselves.
#### Income Stream Sets, Or What To Do When A New Income Stream Arises

If A makes $200k/year and B $100k/year, then by default the fairness check makes it so that A pays a great proportion of the (3*12 = $36k) than B, since A is more capable. It's easier to see why this is fair if you compare two monetizers, one making $200k/year, and the other $20k/year. The $20k/year monetizer should not be expected to split the burden equally.
Every member is providing a bucket's worth of value to the group (probably more), regardless of whether they are able to monetize that value. In other words, a housekeeper or a stay-at-home parent is providing real value that "the market" simply does not choose to monetize. In other words, each member is "paying back" their bucket's worth of value every month, regardless of how much they actually receive in tokens from the market.

In the analogy of the oxen drawn carriage, the $20k/year monetizer is a smaller oxe than the $200k/year, and should not be burdened with the "weight" that is expected of the larger oxen. It would be like expecting a small child to life 100 pounds (several times their weight), simply unreasonable.
But what happens when the market decides to send them tokens? In other words, what happens when a new Income Stream is created?

#### Monetizers Sets, Or What To Do When A Non-Monetizer Becomes A Monetizer

The idea is that, on average, everyone is providing a bucket's worth of value to the group (probably more), regardless of whether or not they are able to monetize that value. In other words, a housekeeper or a stay-at-home mother is providing real value that "the market" simply does not choose to monetize. They are, in other words, "paying back" their bucket's worth of value every month, regardless of how much they actually receive in tokens from the market.

But what happens when the market decides to send them tokens? In other words, what happens when the former non-monetizer starts to monetize their value?

The fairness check only operates between monetizers at the time they are monetizers. The non-monetizer *was* providing their bucket's worth of value to the group (or society) and so does not share the burden that previous monetizers were sharing between themselves. However, once they enter the monetizing set, then from *that point on* the fairness check starts to operate between them and the other monetizers.
The Fairness Check only operates between Income Streams at the time they are Income Streams. The member *was* providing their bucket's worth of value to the group (or society) and so their new Income Stream's weighted contribution does not include previous months. However, an Income Stream begins, from *that point on* the Fairness Check starts to operate between it and the other Income Streams.

## "Windfall Problem"

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