Preference revelation

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's likely that public goods will be under or over supplied.[4][5][6][7]

Overview

Unlike private goods, public goods are non-excludable and non-rivalrous.[8] This means that it's 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

References
  1. Public Choice: An Introduction
  2. John, McMillan (1979). "The Free-Rider Problem: A Survey". Economic Record. 55 (2): 95–107. doi:10.1111/j.1475-4932.1979.tb02209.x.
  3. Public Goods and Multi-Level Government
  4. Kennett, Patricia (2008). Governance, globalization and public policy. Edward Elgar Publishing. p. 28. ISBN 978-1845424367
  5. "Public Goods and Public Choices" (PDF). Archived from the original (PDF) on 2005-05-20. Retrieved 2005-05-20.
  6. User Charges for Public Services: Potentials and Problems
  7. Ethical Dimensions of the Economy
  8. Providing Global Public Goods
  9. The Encyclopedia of Public Choice, Volume 2
  10. Multipart pricing of public goods Archived 2013-12-03 at the Wayback Machine
  11. Throsby, C.D.; Withers, Glenn A. (1986). "Strategic bias and demand for public goods". Journal of Public Economics. 31 (3): 307–327. doi:10.1016/0047-2727(86)90063-0.
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