Imagine that by using provision points with money back guarantees and rebates, each individual instead reveals 95% of th

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Imagine That By Using Provision Points With Money Back Guarantees And Rebates Each Individual Instead Reveals 95 Of Th 1 (84.61 KiB) Viewed 10 times

Imagine that by using provision points with money back guarantees and rebates, each individual instead reveals 95% of their true WTP for each quantity. Person A B Social Pass/Fail True MB(q=1) $100 $80 New Revealed MB(q=1) MC(q=1) MC(q=1) $40 $40 True MB(q=2) $50 $40 O The efficient quantity is lower. New Revealed MB(q=2) MC(q=2) MC(q=2) $40 $40 The efficient quantity is the same. The efficient quantity is higher. True MB(q=3) $25 $20 New Revealed MB(q=3) How does the efficient societal quantity compare to the highest quantity that will pass with revealed at 95%? MC(q=3) MC(q=3) $40 $40