Suppose that a special interest group comprises 1 percent of society, and a proposed law would give them $10,000 of benefits but cost society $900,000. The special interest group will oppose this policy because the costs exceed the benefits.

Question

Quizplus · Accepted Answer

The special interest group in this scenario will actually support the policy, even though the costs exceed the benefits for society as a whole. This is because the group will receive a significant benefit ($10,000) from the policy, while paying only a very small share of the total cost ($9,000). Therefore, the policy is actually in the group's self-interest, even though it is not in the interest of society as a whole.

Suppose That a Special Interest Group Comprises 1 Percent of Society