A Practical Public Good Mechanism and Policing Application

Abstract

How can a government effectively police the population? We propose a modified Groves-Ledyard (1977) mechanism that estimates the demand for a public good using samples of the population and selects an approximately optimal quantity. We then test our mechanism in a virtual Phase-0 trial that mirrors existing experiments with known utility functions over generic commodities and find our mechanism performs extraordinarily well. We then test our mechanism in a Phase-1 experiment where participants choose the quantity of police in a rich virtual environment. We find that both our mechanism and the original yield the same police quantities, with ours having the additional benefit of being more practical to implement at scale.