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Some examples we discussed too in the session with IE framework and challenges they have:
Eg 1: Conservation Finance
Credit Issuance Process
How it works
- Credits are derived from measurable metrics
- eg: a landowner hires a third-party evaluator to assess weather trees are standing
- the evaluator translates this data into credits that can be issued in a market as a reward function
Challenges:
1. Estimation Issues:
- estimation step is often inaccurate
2. Friction at every step
- assigning projects within scope involves significant friction
- outside digital domain, processes become even slower and more cumbersome
Eg 2: Scientific Publishing
How it works
- Journals act as IEs for knowledge
- Each publication venue carries a reputation score (eg: impact factor)
Incentive Loop
- Goal for scientists: accumulate reputation through publications
Problem/Challenge:
- The evaluators (journals and conferences) have been entrenched for over 100 years.
- Their reward loop has not been updated which creates rigidity, inefficieny, and misaligned incentives.
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