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2. Suppose that the government used the Groves mechanism and undertook a public project. The mechanism generated a deficit d, and the government will
2. Suppose that the government used the Groves mechanism and undertook a public project. The mechanism generated a deficit d, and the government will finance it through a special lump-sum tax of d/n for each individual. If agents anticipate such a tax, will it affect the truth-revealing property of the Groves mechanism? (6 points)
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Principles of economics
Authors: N. Gregory Mankiw
6th Edition
978-0538453059, 9781435462120, 538453052, 1435462122, 978-0538453042
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