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Soliciting Accurate Evaluations of Public Goods

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  • A. H. Barnett

    (University of South Carolina)

Abstract

Among the many problems faced by policy makers in attempts to use public funds efficiently, none is more troublesome than that of inducing users of public goods to reveal their demand prices. The difficulty in attempts to solicit demand prices falls under the general rubric of the free-rider problem, and is manifest in the propensity of users to behave strategically when asked to reveal evaluations. Several preference revelation devices have been proposed to surmount this problem, but all of these schemes are seriously flawed. This article presents a device which overcomes some of the flaws contained in previous work. The preference revealing mechanism proposed here is a bidding mechanism which takes advantage of the commonly found trait of risk-aversion to discourage strategic revelations.

Suggested Citation

  • A. H. Barnett, 1981. "Soliciting Accurate Evaluations of Public Goods," Public Finance Review, , vol. 9(2), pages 221-234, April.
    • Handle: RePEc:sae:pubfin:v:9:y:1981:i:2:p:221-234
    DOI: 10.1177/109114218100900206
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    References listed on IDEAS

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    1. Groves, Theodore & Ledyard, John O, 1977. "Optimal Allocation of Public Goods: A Solution to the "Free Rider" Problem," Econometrica, Econometric Society, vol. 45(4), pages 783-809, May.
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    3. J. H. Dreze & D. de la Vallee Poussin, 1971. "A Tâtonnement Process for Public Goods," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 38(2), pages 133-150.
    4. Barnett, Andy H & Yandle, Bruce, Jr, 1973. "Allocating Environmental Resources," Public Finance = Finances publiques, , vol. 28(1), pages 11-19.
    5. Edward Clarke, 1971. "Multipart pricing of public goods," Public Choice, Springer, vol. 11(1), pages 17-33, September.
    6. Peter Bohm, 1971. "An Approach to the Problem of Estimating Demand for Public Goods," Palgrave Macmillan Books, in: Peter Bohm & Allen V. Kneese (ed.), The Economics of Environment, pages 94-105, Palgrave Macmillan.
    7. Joseph Greenberg & Robert Mackay & Nicolaus Tideman, 1977. "Some limitations of the groves-ledyard optimal mechanism," Public Choice, Springer, vol. 29(2), pages 129-137, March.
    8. Tideman, T Nicolaus & Tullock, Gordon, 1976. "A New and Superior Process for Making Social Choices," Journal of Political Economy, University of Chicago Press, vol. 84(6), pages 1145-1159, December.
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    Cited by:

    1. JM Ford & DL Kaserman, 2000. "Suicide as an indicator of quality of life: evidence from dialysis patients," Contemporary Economic Policy, Western Economic Association International, vol. 18(4), pages 440-448, October.

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