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Unformatted text preview: a Government incentives for building the lighthouse are different for different players. Politicians: Want to be elected and re-elected Bureaucrats: Increase budget Voters: Rational ignorance* Special Interests: More business So special interests will lobby politicians and bureaucrats, the bureaucrat is likely to also lobby politicians if it helps them. *Rational ignorance: Decision to NOT acquire information because the cost of acquiring it exceeds the personal benefit from i t On the flip side, the government can decide to overproduce the good (in the example, lighthouses) past the efficient amount. Q Total Catch MB MSB 0 0 - -Sheet1 Page 2 1 100 100 100 2 180 90 80 (new fish) 3 240 80 60 MB > MSB This is overproduction of the common resource (fish), so the government can set a quota....
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