This article originally appeared in PrimeDAO. It is my answer to the question of why liquidity at very early stages of the innovation can be a feature rather than a bug. “Perverse incentives work like an ill-tempered genie, giving you exactly what you asked for but not necessarily what you wanted.”
This process of owning the tokens of your competitors lead to win-wins for those playing the game, but bad outcomes for other stakeholders who are not in the game. In some fields e.g. scientific research this sort of collaborative outcome may be socially desirable, but in many other markets this kind of collusive behaviour leads to anti-competitive practices. If Doudna and Zhang pool their resources rather than starting competing firms using rival IP, they could drive up the price of liscensing CRISPR and make us all worse off. https://www.tse-fr.eu/sites/default/files/TSE/documents/sem2015/io/schmalz.pdf.pdf
This process of owning the tokens of your competitors lead to win-wins for those playing the game, but bad outcomes for other stakeholders who are not in the game. In some fields e.g. scientific research this sort of collaborative outcome may be socially desirable, but in many other markets this kind of collusive behaviour leads to anti-competitive practices. If Doudna and Zhang pool their resources rather than starting competing firms using rival IP, they could drive up the price of liscensing CRISPR and make us all worse off. https://www.tse-fr.eu/sites/default/files/TSE/documents/sem2015/io/schmalz.pdf.pdf