== g2 20' == Consider a special case of the model of public goods provision from...

Transcribed Image Text:

== g2 20' == Consider a special case of the model of public goods provision from class in which v(g) g and k(g) where > 0 is a parameter measuring the efficiency of government production. Suppose that, prior to the election, a policy-motivated politician with valuation Op from public goods is in office. This office-holder can exert effort to increase government efficiency: by exerting effort level e 0, she can generate efficiency (e) = e, but this imposes utility cost 2. After government efficiency is determined, an election between two office-motivated parties is held to determine the level of public goods provision. (a) As a preliminary step, suppose that the office-holder also gets to determine how many public goods are provided (i.e., we bypass the election). How much effort does she exert to increase government efficiency? What level of public goods is provided? (b) Now return to the full model in which an election determines the level of public goods. How much effort does the office-holder exert? What level of public goods is provided? (c) Explain how and why your answers from (a) and (b) differ. == g2 20' == Consider a special case of the model of public goods provision from class in which v(g) g and k(g) where > 0 is a parameter measuring the efficiency of government production. Suppose that, prior to the election, a policy-motivated politician with valuation Op from public goods is in office. This office-holder can exert effort to increase government efficiency: by exerting effort level e 0, she can generate efficiency (e) = e, but this imposes utility cost 2. After government efficiency is determined, an election between two office-motivated parties is held to determine the level of public goods provision. (a) As a preliminary step, suppose that the office-holder also gets to determine how many public goods are provided (i.e., we bypass the election). How much effort does she exert to increase government efficiency? What level of public goods is provided? (b) Now return to the full model in which an election determines the level of public goods. How much effort does the office-holder exert? What level of public goods is provided? (c) Explain how and why your answers from (a) and (b) differ.