Welcome to Ed Clarke's Public Goods Home Page

This Page is devoted to exploring recent advances in public goods decisionmaking, including applications of the demand revealing process. The author is a Senior Economist in the U. S. Office of Management and Budget, Office of Information and Regulatory Affairs.

See Ed Clarke's Home Page

Overview of Demand Revealing Processes

The demand revealing process has been widely regarded as a "solution" to the "free rider" problem in public economics. See Public Goods Home Page Index

See also Overview to Applications of Demand Revealing Processes and A Simple Textbook Example

To summarize from a forthcoming book:

The demand revealing process has been called "a new and superior process for making social choices", a process that holds some promise of "creating an intellectual revolution in economics and politics". It relies on a so-called "Clarke tax" or "pivot mechanism" to ensure that individuals/groups will adequately consider the social cost of their influence on social outcomes, thereby ensuring truthful revelation of preferences and overcoming the "free rider" problem of public goods provisioning. This book outlines Clarke's approach to the use of demand revelation in the creation of "demand revealing markets" accompanied by the improved management of social entitlements to public goods and services. Based on these refinements, he shows ways of achieving improved government performance relating to taxation, spending and government regulatory management.

These mechanisms were highlighted in the award of the 1996 Nobel Prize. The Nobel Committee based the award to William Vickrey, in part based on his development of the "second price auction" as a "truth telling, incentive compatible mechanism. The auction "underlies the so-called Clarke-Groves mechanism for eliciting truthful tenders for public projects". Proponents of the mechanism acknowledge that it "will not cure cancer" or "stop the tides". However, by overcoming the "free rider" problem and the related problems of organized interest groups and "rational ignorance" of voters, it can mitigate the consequent misuse of the government's taxing, spending and regulatory authority. In this revised edition of his original 1980 book, Clarke describes and reviews other recent work, notably Martin Bailey's Constitution for a Future Country, which describes in detail how these advances in an improved political economy can be achieved.

Recent Advances and Applications

A forthcoming reprint of my 1980 book, summarized above, describes recent advances toward application, oriented towards improved management of "entitlements" and the organization of "demand revealing markets" See Afterward to Demand Revelation and the Provision of Public Goods In addition to my work, applications of the process are explored from a more philosophical perspective in Edward Coverdale's Homepage, See A Stroll With Edward Coverdale and his Confessions of A Geoist.

Click here for biography of the author.

Related Web Information

More recent work on applications of the process relates to such areas as "global public goods", information technology management and the management of aviation. See
and Links as well as a special
Applications Home Page
for these and several other interesting applications of the process as well as recent advancements in the theory of demand revealing.
Thank you for visiting.

Contact Information: Comments and inquires are welcome

Edward H. Clarke, 4433 P St. NW - Washington, D. C. 20007


Updated 2/22/02 - Edward Clarke@hotmail.com - https://demandrevelation.com

Links to other sites on the Web

Public Goods Home Page Index
A Stroll With Edward Coverdale
Confessions of a Geoist by Edward Coverdale
Ed Clarke's Public Goods Applications Page