Question
A local government decides to use a Groves Clark mechanism to decide whether it should build a park or not. There are 150 families
A local government decides to use a Groves Clark mechanism to decide whether it should build a park or not. There are 150 families who might benefit from the presence of the park. 50 of the families are dog walkers who value the park at 20. 50 of the families have young children who value the park at 10. 50 of the families have neither dogs nor children and value the park at 2. (a) If it costs c to build the park, what values of c is it efficient for the park to be built? (b) For each value 0 c 2000 describe how much money the council raises from the Groves- Clark mechanism. (c) What is the maximum that is raised by the mechanism?
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The Economics Of The Environment
Authors: Peter Berck, Gloria Helfand
1st Edition
978-0321321664, 0321321669
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