By Bryan Caplan
Here’s a spot-on response from my Ph.D. Micro final.
True, False, and
signaling models, selfish agents might voluntarily supply public goods.
True. Yes, if donating to charities, giving blood, or sponsoring militia units or adopting part of a roadway signals, “I am a nice guy; vote for me and/or buy my products and/or marry me, because if I am this nice to complete strangers, imagine how great I am to my constituents/customers/family! Also, I can afford to do a lot for you.” It’s like potlatch!
HT: John Fast