Designing Refund Bonus Schemes for Provision Point Mechanism in Civic Crowdfunding
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Civic crowdfunding is a practice with which interested players can raise funds for a civic project. With Blockchains gaining traction, civic crowdfunding can be implemented in a reliable, transparent and secure manner with smart contracts, thus becoming a powerful tool for social planners and governments. One fundamental challenge in civic crowdfunding is free riding - once the civic project is provisioned, all players, irrespective of their contribution can enjoy its benefits; hence, strategic players may free ride. Researchers have addressed this challenge through the game theory lens. The proposal by Zubrickas et. al. of refund bonus to the contributors in the case of the project not getting provisioned has interesting properties. As observed by Chandra et. al. however, this approach faces a challenge of race condition. To address this, their proposal, PPS considers the temporal aspects of a contribution in civic crowdfunding. However, PPS is computationally complex and is difficult to explain to a layperson. In this work, we look for all important properties a refund bonus scheme must satisfy in order to discourage free riding while avoiding the race condition. We identify Contribution Monotonicity and Time Monotonicity as sufficient and necessary conditions for this. We also propose three simple refund bonus schemes which satisfy these two conditions. Further, we introduce three novel mechanisms for civic crowdfunding deploying these schemes - PPRG, PPRP and PPRE. We show that PPRG is the most cost effective mechanism amongst these, as well as PPS, when deployed as a smart contract. We then prove that under certain assumptions on valuations of the players, in PPRG, PPRE and PPRP, the project is funded at equilibrium. We simulate these mechanisms in Reinforcement Learning enviornment to show that they do not trade off cost efficiency for provision accuracy.
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