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Consider a class of 25 Microeconomics students some of whom are confused about a concept after a professor explains it A student who reveals his confusion by asking a question loses 10 utils

Consider a class of 25 Microeconomics students, some of whom are confused about a concept after a professor explains it. A student who reveals his confusion by asking a question loses 10 utils. However, when the professor clarifies the concept, each confused student benefits 2 utils. At what level of confusion (number of confused students) is a question from a confused student socially efficient? Without participation incentives, will a confused student ask a question when it would be socially efficient? How will they know it is socially efficient? How would you design an incentive system to generate questions from confused students?

May 01 2020 View more View Less

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