Per all this prognostication of CIRM royalties, there is a "simple" test:
Rather than giving these researchers "free money", the money should be a LOAN, to be paid back (with interest) in 10-15 years. How many will take the CIRM money under those conditions??? Let's put the "risk" on their backs, rather than letting them have the dollar today, and be paid back in a "future dollar".
Of the "future dollar" business, it is quite troubling to note that Baker did not discount "future dollars" in his study. As Gilbert noted:
The obvious problem with this [Baker-Deal] calculation is that a dollar of
revenue earned ten years in the future does not have the same value to the state as a [p. 1111] dollar of revenue earned in the present. (...) A correct value calculation should discount future revenue flows by the time value of money.
The concept of the "time value of money" is central to the way legal settlements are structured, and is something that is well-known generally (for example, lottery payouts). It is sad to note that California voters had only the Baker study at their disposal BEFORE voting, but now have the Gilbert study AFTER voting.
However, this is really "deck chairs on the Titanic" as there probably won't be any royalties to receive in the first ten years of Proposition 71. [See 88 JPTOS 239 (March 2006), not cited by Gilbert]
On foreseeability, there has been much discussion of Andy Reid's decision to punt on a 4th and 15 with only about 2 minutes left in the Eagles-Saints game. On January 14, 2006, Philly channel 10 had an interesting discussion of this decision. Howard Eskin noted that only one 4th and 15 (out of 17) had been made in 2006, AND that Reid had determined the Eagles would (most likely) get the ball back with "one minute two seconds left." The difference that bothers most people is that the Eagles had a REAL chance to try on 4th and 15 (whatever the probability of success) but only a HYPOTHETICAL chance to get the ball back. The probability of "what you are going to do in the future" has to be discounted by the probability of getting to "that particular future." This is like Baker's treatment of hypothetical future royalty dollars from Proposition 71 as if they were REAL dollars now. [Baker failed to discount the value of future dollars AND Baker took an unreasonable view of even getting those dollars; one can argue about the latter but there was no excuse about the former.] And the Eagles probably had a lot better chance of making 4th and 15 than California taxpayers have of earning from $ 537 million to $ 1.1 billion in royalties from research funded by Proposition 71.