Preference revelation
In public choice theory, preference revelation is an area of study concerned with ascertaining the public's demand for public goods. According to some economists, if government planners do not have "full knowledge of individual preference functions", then it's likely that public goods will be under or over supplied.Overview
Unlike private goods, public goods are non-excludable and non-rivalrous. This means that it's possible for people to benefit from a public good without having to help contribute to its production. Given that information about marginal benefits is available only from the individuals themselves, people have an incentive to under report their valuation for public goods.
