OVERVIEW

This is an overview of several papers relating to applications of the demand revealing process, which motivates accurate revelation of preferences for public goods. For readers not familiar with these processes, there are a number of sources which explain the operation of the basic mechanism, called a "pivotal" or "Clarke tax" mechanism.

Examples: An appendix to a recent reprint of my 1980 book provides good textbook examples of the mechanism

See also Ed Clarke's Public Goods Applications Page
for interesting applications

For an introduction to the use of these mechanisms in a complex regulatory environment, it is suggested that the reader consult the following (see also Lists We Like for related work):

"Efficiency and Justice in the Management of Global Externalities" by T. N. Tideman

(does not include Figure 1).

URL: www.economics.uni-linz.ac.at/Members/Pru.../papers/Co2.htm

December 1996. A fair mechanism for efficient reduction of global CO2-emissions* by. Josef

Falkinger, Franz Hackl, Gerald J. Pruckner.

A paper closely related to the above and relating to many of the aviation related applications elorated in the papers which appear in this section appear in "Airport Congestion and Noise: The Interplay of Allocation and Distribution" by Brough, Clarke and Tideman, Transportation Research Board (1995) . (An electronic version will be added at a later time with permission from the publisher).

The papers provided here build on Clarke, Demand Revelation and the Provision of Public Goods. (1980). Shortly after the publication of that book, I had the opportunity to explore use of the techniques in government budgetary settings, particularly in the budgeting of technology. I also explored the use of the process in the context of more efficient techniques for managing public enterprise, particularly in developing countries.

The first paper, "Demand Revealing Reconsidered" represented an attempt to cope with many of the criticisms that had been levied against the process since the time it had gained significant notoriety in the late 1970's. In this paper, I also concentrate on how to best motivate the overseer of the process (I call him the Ruler) to truly administer the process so as to approximate benefit (Lindahl) taxation.. The next two papers, entitled "The Demand Revealing Governance of Enterprise" and Privatization, Regulation, and the Demand Revealing Governance of Enterprise" elaborate on some of the techniques described in the first paper, while also laying a groundwork for applying the technique to enterprise (particularly public enterprise) governance. The fourth paper, "Demand Revealing, Information Technology Management, and Government Regulation" provides a perspective from potential users of such a process, particularly agency managers who might utilize such a process in a decentralized decisionmaking setting.

The final two papers are a conception of a project, one that would utilize these techniques in the management of public enterprise affecting aviation development. Following deregulation of the airlines in the late 1970's, the author spend many years concerned with problems of regulatory management affecting aviation. Along with other colleagues, he developed a conception of hopefully workable incentive compatible approaches to aviation management, particularly the financing of the air traffic control system and pricing of airport takeoffs and landings. While some of the ideas are elaborated in the paper referenced above (Brough, Clarke and Tideman, 1995), many other ideas relating to incentive compatible enterprise governance are elaborated in the project description and accompanying discussion paper.

Note: The author apologizes for numerous Figures which do not appear in the text of these papers. These materials will be added as a supplement to this page at a later date.

COMMENTS WELCOME.

Any comments on the material contained herein regarding "Demand Revealing Processes" or requests for further information may be directed to Edward_Clarke@hotmail.com

The author also expects to revise much of this work, in the light of advances made by the work of Martin Bailey. See, in particular, my "Incentive Compatible Resource Allocation: An Application to

'Distributive' Federal Programs" (published in Planning and Markets, 2000)