Question

Since the city of Davis thinks “light pollution” is bad, neighborhoods have to fund their own streetlights. Suppose three neighbors must vote on the installation of a light that costs $210. The cost of the light will be shared by all three. Al values the light at $50; Belinda values the light at $50, and Chaz (who rides their bike at night) values the light at $200. If the voting rule is that the majority wins, does the light get purchased? Is it efficient to purchase the light?

Answer 1

No light will not be purchased as per majority voting rule.

Bcoz each person pays for light = 210/3 = $70

Now if the personal valuation is above the contribution made ($70) by each person , then the person will vote for light.

So only Chaz will vote as his valuation is 200, which is above 70.

A & B valuation is below their share of total cost,.

Thus 2 person do not vote for light, only one person does.

Hence light will not be purchased.

Yes ,it is efficient to purchase the light.

bcoz total valuation for light = 50+50+200 = $ 300, is above total cost of $ 210.