On Mon, 26 Aug 2002, Fred Foldvary wrote: > If the average cost, say for mosquito abatement, would be $5, and that person > states he would pay up to $10 for it, then he is knowingly contributing to > the total stated value, and if the total value exceeds the cost, is willing > to pay the $10, regardless of his reason. All we really should care about is > how much he is willing to pay. There can be all sorts of reasons why one > would favor a program. One could, for example, favor a freeway because he > thinks it helps birds navigate, even if in fact it does not. No matter, he > is willing to put up bucks, and that is what counts.
The important point is that there's a disjoint between the willingness to pay and the actual payment: an expressed vote preference, even in the dollar terms of the Tideman-Tullock procedure, leads only probabilistically to actual requirements to pay the amount. If the expressive voter is risk neutral, faces a 1/million chance of being decisive and having to pay, and derives expressive benefits of $1 from saying "I like poor children so much, I just voted $1 million in favour of program X that will help the poor", the voter will "reveal a preference" of one million dollars for program X. Of course, risk aversion will mitigate this somewhat, but if inefficient programs give larger expressive benefits, then instituting the Tideman-Tullock procedure will lead to worse outcomes. Eric
