great presentation, doc.

But under some (possibly?) plausible convexity assumptions, less distortion would result from taxing both capital and labor income than from taxing only capital income.

My issue with your proposal is that this would make the jurors rely even more upon emotions than reason to judge the guilt of the defendant. To be forced to allow a stranger to camp out in your residence does evoke a visceral reaction in many people (I guess that is why we have laws against trespassing). There could be some trials where the defendant is creepy/unlikeable/unpopular/has prior record etc and to force a juror who votes to acquit to live with the former defendant would probably push jurors to vote guilty. This will lead to association of creepiness/unsociability/unpopularity with guilt rather than probability exceeding reasonable doubt. For example a defendant with some minor prior felonies would easily be convicted for a more serious felony even of reasonable doubt exists (maybe even in the face of a cast-iron alibi).

Criminal trials are rigged (at least this was the initial intention) against the government. The government bears the burden of proof. The defendant benefits from the presumption of innocence. There are good reasons in history for this. Your proposal would weaken these procedural safeguards.

In your talk you mention that objections have been raised regarding this proposal of yours. Could you elaborate on them?

BTW your proposal of quizzing jurors after the evidence/testimony period to gauge their knowledge of the evidence/testimony presented and reward them with cash prizes is a damn good idea.

Kremer addresses several issues including mechanisms for preventing collusion:
1. The gov could (in fact, would) base the offered price on the 3rd highest bid (as you mentioned)
2. Cancel the randomization process and award the patent to the highest bidder – if collusion was suspected
3. Impose a mix of licensing fees, disclosure demands, etc.
4. Prevent inventors from buying back their patents from winning bidders or making side payments (although, he admits this might prove difficult)

He also briefly discusses the importance of standard procedures such as requiring sealed bids, rewarding whistle-blowers and prosecuting those found guilty of collusion. He also suggests using ‘Ceiling Prices’ – using the private value of the patent as the floor of the buyout price.

As to your volume concerns, Kremer suggests allowing the gov discretion on which patents to purchase (i.e. if the price of a particular patent was too high – they could decline the purchase and cancel the randomization process). There are some nuances to his argument (substitute and complementary patents, etc.) that I’ve excluded, partly because of opportunity cost considerations and partly because I’m sure SL can bring light to the issue with more eloquence and concision.

With regards to the patent idea, there seem to be a number of problems with it (although maybe these are covered in the more detailed expostiions mentioned above):
What is to prevent me from patenting some useless invention and then bidding a very high amount in the hope that this is one of the patents which the government buys for the public domain? One solution is that you could go for an auction where, say, the winner only has to pay the third highest bid, but then I could get a number of my friends to also place large bids on the understanding that no money would actually change hands even if they won.

And how many patents are there? It seems unfair on an inventor that they only get a samll amount for their invention just because their patent wasn’t noticed among a mass of others. Wouldn’t the highest prices go not just to those who had the best ideas, but to those who were best able to advertise their ideas prior to the patent auction?

With regard to obesity, Seth Roberts (of UC Berkeley) claims that we’ve gotten fatter because of “ditto foods”, i.e. foods that taste the same every time. (Consider packaged mac&cheese vs. the homemade equivalent.) It’s pretty interesting stuff.

More info on Kremer’s ‘Patent Buyouts’ can be found in a tidy little text called “Entrepreneurial Economics”, edited by A. Tabarrok (of Marginal Revolution fame). Landsburg provides the Foreword and contributes a ‘Modest Proposal to Improve Judicial Incentives’. He is brilliant, as usual.

Landsburg,

We need to get you on TV more frequently. Thoughts?