Preference revelation
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In public choice theory, preference revelation (also preference revelation problem) is an area of study concerned with ascertaining the public's demand for public goods.[1][2] According to some economists, if government planners do not have "full knowledge of individual preference functions",[3] then it is likely that public goods will be under- or over-supplied.[4][5][6][7] When there is no market to induce people to reveal their subjective valuations, economists say that there is a “problem of preference revelation.” When perfect compensation is possible in principle, it may be impossible in fact because of the problem of preference revelation
Overview
[edit | edit source]Unlike private goods, public goods are non-excludable and non-rivalrous.[8] This means that it is possible for people to benefit from a public good without having to help contribute to its production.[9] Given that information about marginal benefits is available only from the individuals themselves, people have an incentive to under report their valuation for public goods.[10][11]
See also
[edit | edit source]References
[edit | edit source]- ^ Public Choice: An Introduction
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- ^ Public Goods and Multi-Level Government
- ^ Kennett, Patricia (2008). Governance, globalization and public policy. Edward Elgar Publishing. p. 28. Lua error in Module:Citation/CS1/Configuration at line 2172: attempt to index field '?' (a nil value).
- ^ Lua error in Module:Citation/CS1/Configuration at line 2172: attempt to index field '?' (a nil value).
- ^ User Charges for Public Services: Potentials and Problems
- ^ Ethical Dimensions of the Economy
- ^ Providing Global Public Goods
- ^ The Encyclopedia of Public Choice, Volume 2
- ^ Multipart pricing of public goods Archived 2013-12-03 at the Wayback Machine
- ^ Lua error in Module:Citation/CS1/Configuration at line 2172: attempt to index field '?' (a nil value).