Using a graph like the one shown in Figure 20.15(b), explain why an individual has no incentive

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Using a graph like the one shown in Figure 20.15(b), explain why an individual has no incentive to understate his benefits from a public good (as on the red line) if the good is provided through a Groves mechanism.

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Microeconomics

ISBN: 978-1118572276

5th edition

Authors: David Besanko, Ronald Braeutigam

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Question Posted: Mar 18, 2016 04:58 AM

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Using a graph like the one shown in Figure 20.15(b), explain why an individual has no incentive

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others +RMB MC TED RMBhers +MBTED RMB others others Quantity

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If his true benefit is understated he pays the blue triangle and receives total benefits equ...View the full answer

Microeconomics

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