Assignment Task: Suppose that the city council is considering the provision of a public library at three possible locations, denoted 1, 2 and 3. Each library costs 1,500 to build. There are three individuals (A, B, and C). If a library is built all individuals will be taxed equally to pay for the costs and this information is known to the individuals. The decision whether to build each library is taken on the basis of a majority vote; and, for each individual, if the individual's valuation is greater than or equal to the cost to them then they would vote in favor of the provision. The table below gives the value that each individual places on building a library at each of the locations:
| Location |
Individual 1 |
Individual 2 |
Individual 3 |
| 1 |
600 |
700 |
150 |
| 2 |
400 |
400 |
800 |
| 3 |
600 |
400 |
550 |
i) Discuss whether the library can be considered a public good
ii) Explain which libraries will be built, and whether the outcomes are efficient
iii) Explain for each of the three locations what decisions would be made using a Clark-Groves mechanism, how much each individual would pay and how much revenue would be raised towards the cost. To ease your calculations, please use excel