An assurance contract, also known as a provision point mechanism, or crowdaction, is a game-theoretic mechanism that facilitates the voluntary creation of public goods and club goods in the face of collective action problems such as the free rider problem. The free rider problem is that there may be actions that would benefit a large group of people, but once the action is taken, there is no way to exclude those who did not pay for the action from the benefits.
An assurance contract, also known as a provision point mechanism, or crowdaction, is a game-theoretic mechanism that facilitates the voluntary creation of public goods and club goods in the face of collective action problems such as the free rider problem. The free rider problem is that there may be actions that would benefit a large group of people, but once the action is taken, there is no way to exclude those who did not pay for the action from the benefits.
Source: Wikipedia "Assurance contract" · CC BY-SA 4.0
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