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Extra info for The Book of the Dead (Pendergast, Book 7)
First, the state may not be able to provide or regulate common goods more efficiently than the market. As Samuelson (1954) has shown, the state faces a problem of obtaining correct information about the preferences of the public for the common good and can thus not be relied upon to produce an optimal amount of the good. This problem has been tackled by economists through the development of normative mechanisms for public goods provision. However, the solutions developed by “mechanism design” research (Blümel, Pethig, and von dem Hagen 1986) ignore the procedures actually used in political decision making on common goods by the affected groups, states, and multi-level systems.
I will come back to this attribute of common goods provision in chapter 7. Attributes of the Actors Many studies of common goods provision are devoted to the question of whether the assumption of individual rationality of actors in economic theory is empirically valid or not (Ostrom 1998). The empirical research has shown that real actors do not always behave as the rational choice model predicts. There is a substantial amount of conditional cooperation, a willingness to sanction, a concern for fairness, as well as trust and reciprocity (Ledyard 1995; Ostrom 1998).
Low-interest rates and lowrisk borrowers would have to exit the market, which, in turn, would lead to higher interest rates, and so forth. Capital would become expensive and scarce (v. Randow 1996: 547). There are numerous similar information goods, where products or services are tested and rated by experts according to a standardized system. Examples are the ratings of hotels and restaurants, cars, personal computers, or of specific properties of products, like their effects on the environment.