Good Answer!
Here’s a spot-on response from my Ph.D. Micro final.
The Question:
True, False, and
Explain: In
signaling models, selfish agents might voluntarily supply public goods.
The Answer:
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
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