O'Reilly logo

Solomon's Knot by Robert Cooter, Hans-Bernd Schäfer

Stay ahead with the world's most comprehensive technology and business learning platform.

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, tutorials, and more.

Start Free Trial

No credit card required

Chapter 3

The Double Trust Dilemma of Development

Economies grow when business ventures develop innovations, which requires combining new ideas and capital. Combining them confronts a dilemma illustrated by this letter sent to a Boston investment bank: “I know how your bank can make $10 million. If you give me $1 million, I will tell you.” The bank does not want to pay for information without first determining its worth, and the innovator fears to disclose information to the bank without first getting paid. The obstacle to financing innovation is that an investor cannot evaluate an idea until after he knows what it is, and after its disclosure he has little reason to pay for it.1

To give another example, a Berkeley mathematician named Richard ...

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, interactive tutorials, and more.

Start Free Trial

No credit card required