Consider a class of 25 Microeconomics students, some of whom are confused about a concept after a professor explains it. A student who reveals his confusion by asking a question loses 10 utile. However, when the professor clarifies the concept, each confused student benefits 2 utile.
1. Discuss at what level of confusion is a question from a confused student socially efficient?
2. Without participation incentives, will a confused student ask a question when it would be socially efficient? Discuss how will they know it is socially efficient?
3. Discuss how would you design an incentive system to generate the questions from confused students?