People have a strong incentive to hide their true willingness-to-pay, or valuation, of a public good because taxing officials might use it to get them to pay more taxes.

Question

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This is because if individuals reveal their true valuation of a public good, taxing authorities might use this information to impose higher taxes on those individuals, based on their expressed willingness to pay more for the benefit they derive from the public good.

People Have a Strong Incentive to Hide Their True Willingness-To-Pay