Class Participation. Consider a course with 40 students, some of whom are confused after the professor explains a concept. The professor doesn t know whether students are confused but will clarify the concept if one student asks a question. A student who asks a question and reveals his or her confusion loses 10 utils. When the professor clarifies the concept in response to a question, each confused student gets a benefit of 2 utils.
a. At what level of confusion (measured by the number of confused students) is a question from a confused student socially efficient?
b. In the absence of participation incentives, will a confused student ask a question when it would be socially efficient to do so?
c. Design an incentive system to generate efficient questioning.