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3. Voluntary contributions toward a public good Van and Carlos are considering contributing toward the creation of a botanical garden. Each can choose whether to
3. Voluntary contributions toward a public good Van and Carlos are considering contributing toward the creation of a botanical garden. Each can choose whether to contribute $300 to the botanical garden or to keep that $300 for a weekend getaway. Since a botanical garden is a public good, both Van and Carlos will benefit from any contributions made by the other person. Specifically, every dollar that either one of them contributes will bring each of them $0.70 of benefit. For example, if both Van and Carlos choose to contribute, then a total of $600 would be contributed to the botanical garden. So, Van and Carlos would each receive $420 of benefit from the botanical garden, and their combined benefit would be $840. This is shown in the upper left cell of the first table. Since a weekend getaway is a private good, if Van chooses to spend $300 on a weekend getaway, Van would get $300 of benefit from the weekend getaway and Carlos wouldn't receive any benefit from Van's choice. If Van still spends $300 on a weekend getaway and Carlos chooses to contribute $300 to the botanical garden, Van would still receive the $210 of benefit from Carlos's generosity. In other words, if Van decides to keep the $300 for a weekend getaway and Carlos decides to contribute the $300 to the public project, then Van would receive a total benefit of $300+$210=$510 , Carlos would receive a total benefit of $210, and their combined benefit would be $720. This is shown in the lower left cell of the first table
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