Consider a class of 25 Microeconomics students, some of whom are confused about a concept after a professor explains it. A student who reveals his confusion by asking a question loses 10 utils. However, when the professor clarifies the concept, each confused student benefits 2 utils.

At what level of confusion (number of confused students) is a question from a confused student socially efficient?

Without participation incentives, will a confused student ask a question when it would be socially efficient? How will they know it is socially efficient?

How would you design an incentive system to generate questions from confused students?

Answer rating: 100% (QA)

Cost to asker 10 utils Benefit to each student 2 utils ... View the full answer