Professional sports teams will sometimes seek public subsidies for stadium ﬁnancing projects that produce large beneﬁts for a relatively small number of fans and impose small costs on a relatively large number of
People. Sometimes these efforts to secure public funding are successful even though the decision is not
Eﬃcient. This is an example of

Question

Quizplus · Accepted Answer

The special-interest effect occurs when a small group benefits significantly at the expense of a larger group, often leading to policies that favor the small group despite potential inefficiencies or broader costs. This is seen in the scenario where sports teams secure public funding for stadiums, benefiting a relatively small number of fans and team owners, while the costs are dispersed among a larger population.

Professional Sports Teams Will Sometimes Seek Public Subsidies for Stadium