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 EUN MON TIJr:: VI/ED THU FRl SAT

SubJect: _ D D D. D D D D Date: /

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 SUN t,;ON TU!:: VvEQ THU FGJ SAT

SubJect: _ D DOD D D D Date: 12 / I /oq

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 SUN MON TUE WED THU FR! SAT

Subject: _ D [] D D D D D Date: 1'2./ 1 / &1

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 SUN MON TUE WED THU FAI SAT

Subject: _ D D D D D D D Date: / /
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)ubject: _ D D D D D D D Date; It I 1 107

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 SUN MON rUE WED Tr.lU FRI SAT

SUbj9CI: _ D D D [J D D D Dalg: / /

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 € U hl t,~Oi'-! TU~ WED Tl-lU FRI SAT

;ubject: _ 10 0 0 0 0 0 0 Date:

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Subject: - - - - - - - - - - ; 7 f - /- D D D D D D D D2te: ! !

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 SUN MON TUE WED THU FRI SAT

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 . SUN MON TUE . INED THU Fn,l SAT

Subject: _ D DOD D D D D2te: / /

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6 - expfGted. utility of p.layev. i: stCl.vtin0 .Clt'
'Info Set H.
 ~>J
MON TUE WED THU FRI

o
SUN

SUbj9Ct: _ D~DD D D Oat9 : 4- / 2 / oct

Def: weak PBG

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. .. f.l!_~ 1'5 _..£2eachC!' ~(..(yve, (Be(tLcupot'1U~~~_B.... -::- ---1J P"'_L .__. . _. . . . _

rw,:" ~ta0<el ber--j ?) .-S ('jJ J

VIti> Vlea- re-(tl.r'OY1skie ~ it-s ~ecUtlcn: &AiV~ ctY'e _ I !
~Vlnw/·\,.-l

RuM PnGt. Lec.cluSh'p =) qi(~) hos pas) neB- ve0tJ' oYI slt\ip ? '
 SUN . MON TUE WED THU FAI SAT

Subject: _ DDDDDDiJ Date: / /

To .0~~_fK_._~_e_t.~_~(. __92(E'~t_ IS __ .l,{PtJQ.~!0!!.V:'rl.J')J._~f.4 )'-'Qp._rr.~ . ._

~

-~_so~:~~:~~=~~~_~~I;~_±~~~~4 JL ()-----------::~::~-_~:-~::::~~::=
·h,r 0- uY\ique, f.AC<~-If'1iJM:::-) ClS:SolM!- L.. 0
----------------------------_.-----_.- -------------------------_._------- -------_._----.------ _._----------------------------------------- --­

...__ .__ . J.Y:'__..<J_r_cJ..~v. ~ f.i_0Ql t.0.~ ~_'Qf-~-----ci(JU ~g_£;,_~ :tQ £Q_~_r_--tl.1ev1 _

.--..---.-------.. - . -.-------------'52--lPt-;--g-'~._t-e~~ ± d x;[~~_J._9.z.Ll'.121" ~~C£1--~ 0 .

.;lPz.

.... __ ._~~_V2L 0!ff.e._y~_\'"\}i0:!( .~--X~-~-p~ft:!P.-----~ _ +________________________ _ _

. . . . . { ;~,(:L-+;~: (·).q:(p,l:±~;~~ (·1 ~(P.)t~:::P. tt;~}1-q.;[4-e,LP,2.1-3------Q---------------

.,

-:: 0

::::::::::::::::::::::::::::::::::::::::::::~:~~~;~::::~:~:-:::::~:~~:-T-~~---~T~T-------~=:_::~:~::~~~:~~:~~~~~

_ ._. .. .__. 3.~~~l~ ~)_~~ l ~------.------.-.-----------~-----.

-'- < 0 b-,

I Soc..

_..__.._..__._ ~y ..~~_~__ ..~s..~~ ~~P..0..~0.~.~~ .. ~Ct-tic;S.--~.0:lf.tA..l.0:-ti0.1-.:._ . .___ ..__.._.. .. ._.__. .__._.__ __.. . _
.--.-----.-----.--..- --}-Ig~ .__g;.cP,} .=_._ --§~@XL-[~-+.~}.F~J_--.-.-- _.._. . . . _._._. ._
,
............. __... _--_._.-.---.---- ---- .. ---.

 Date: 1'3 / 02/ 07

\ aP,

\(
dX..
1. jP(j, oOt,tIc( be- C+) oY (-)

t=ollOW~V19 PreJevr-ed.
--:J If both ttyrYIS hCtve" ieteVltlCM. c.ost &. DeManol M"fV1Cht/YJ

---
"\ "I [P1, - G~c,)] G~)
a~)
/ I
dTi 1 .,... P1 _~::_ X, ( .) ~ } ::::: > 0
apz' ··.. 1 c>Pz _ aPz'
"
,
\\
"
!VIR -- ('viC =) jfVl f* :;- f\IIc
 Date: / /

Cl9 CapaC-iN &r1strniV1± GaMe,

Fi(~t PQriod: ~~clrl hrNl CVtoo~eg its prvclucHoYl Capacity; Yi

I
 Date: / /

, (j) COUuSiOV\

'tvlulmrlCOUS ILlI .
N N

fv1 ctx 'Z II' = PCy) Y- ,2- C. [1./,)

~;1 . ~-I ­
lI,,·· ','1"
-- peLf, +l/. +••• +1I..) (\1, + ... +LI.• ) - rC,(\.IH •.•
~
CN(14,,~

- If fhiVl1 Mco<iMizes in 011«1 profit at Carrels ~oLutloVJ y*'

Proof..,
7
No one WOVlt to c,ltleCt t / dJ.,viCde....

.
.

 Date: / /

- tJ

o ?

> (/

- ~IAJ It FI'M 1 ooes vlOt believe. tVItlt other Ar!V1S vv1/ 1 :ztl'clr.. . 1N1'1t1 fiu.-carte-\ Oll<tpl-lt,
~

I
I

!
I

Date: / /

> \I_ll- '> ~c

11­

~e{e, 1i? = i-Period.. pmf1t of fi(m i h-OrYl deviation (c--hecl:!if16)

,......-j-
hL
= 1- Peviod. prz,fif- of V\
'" tavte,t ou-r-COfl4t
/'o./C­
II k == 1-Peviool Pmfi+ of ."
'" Co()Y"V10+ 0unofVl!.,

11_'4< + Plr-'" + 7.'iI_~ + _ Ii-* (1 +P+ p\... )

...-- D
11- + PIi· +
c pz.,.... c-
11- -t .••
,.....,0
II. + p 'iT.c. ( 1 + P+ P:l..)
-t ...

, Tri is ......
-9
~D
\1-+
p_c
11 _
1

-------'-------f p ~
S,!;
____
11,-0

lit - II~
~*~
II~ _

QutrOtlll€, VVlll be.- colluSi 0V1 1() eve-t{ petiClO!.

If ....,.p ..-c
II, - II,
 Date: / /
gp~

~. '\he, basic idee< of (s{,!0e,J&llVle Perfect) pLAniSVlfY1eVlt t;;trut~j€6 Carl be.. ex'tevl/;led

V) CoopemhOVl IS not pCtr't of GPE 'l~epeC<1'eet (3-OlNl€.,

 Date: 2if / "3 / (jq

. I

I ~ 10ut If info aioolA-t qucJit\.[ is c06"tllf tv Oiorn."IVl.

I ~
buyers t. se/(ef! \Mil v'lot Vtu,ve, thL saMe 'It')fa any MOl e.

/ SO plUMS

............. 50 LeYl'loVls

to re-t! t 2. 7 000

\", 111000
,

a,....ot onh, lervlQtl$ get sole(.0·

 Date: / /

\
low qualiht ~ ~

&~e 1; DnlL( Low- q{,(ali~ rxociucu;J..

~ But It Costs" $ ll.bIJ

,f' '

1'1- ----/
/
11.!1J • I 'O.y
/'
-+--+---f-+-~G..

f1-1

Case '$; BOM qualities ave- produced. ~~ '1

o.t lea,st 4':.11.50

h \2

1"2.­
vvflliM W PCt'"( 4r 11.50
,-, The- hi~hev tt-u. ava~ q,ualih{, +4t bettev- off t{"e- COVl1UAA€-Y'S' Me"
C0>'15L{Mer~ are, \tVIllifUj to pay MQfe,
 Date: / /

quPP(}~, tW- pa)(:!ucea earl cltloo££ 'Iv pr1?du u. a hi@h-q(,(ali, at cC'st -:; $.11.50.
&. prpcluu. lt low - quCt-Liiv( '" :: q, 11.

If it be-haves eOMpeti+ive4( =) 'lit.e. produCtV' \;VClV1t to ?pdul,.(. on/I-( low q~aliht

(g,rll£e.- it-I?elieve wt it VluS vm SMtili effee-t

k"' (!onsu(IAer~ aft OYlllf w~'i"'j to pay 4; g tor a low- qut<-(i!y

~

R.tblic GoodS
ExtemClli tiU.

2-) l-+iolcttr1 ActioYl -;:;.') "Mo(1;l,1 Ho.wn;{.!"

 Date: / /
L.(t,ifl.i1e.w
Adverse Selection - hicWeV\ mfo

.... GlvlSeS i-JileVl [in lllciividM.v-J's, etu;~jOY1 to parh'cipcdt 'il'\ 'liN. Market- (!o(l-\'e~<, negC{\ll/~
~
.
€Jt'2. A (VlDcW.'flt}- £rlYlS g V'iDvkecr
'n~

\ work 0-+ home..

A) PlAbliClLf Obrevvct.,le T'(pt$ - Perfect TVlfo

~ Prvductivlht: [9 e[~,§g.----'C=----IR _
(,JM(f. 0 ~ e <: e ~ o(J

eac"Vl e Ciln earV'\ .rf wovki Oft V101'\'\L ~ (€,seYVD..nve .y.J!.Iqe.

crzs -rUhnolo =- 1. CO~'YI eti+ive -h{N}g =='') 'Ii "" D

e §

, Nf rce) e +
-J
r1 - runl Y'(e)~ J
d Fee) = N fee) h<El) (1 +f1-
...
I(e~ re\de I

§ ~ ~

-4- . ! Y
, b
(1)
 Date: / /

t. I ce) :. 0 . We 17 (B) >e

,.
e ~ wee>

.p,~"

.1­
B (// I I

~)I
, ,,( /:
1 z. '3 i.l- J) b
t l' t
~ e e ,,-= e-w : ;:. ()
f(8)

"----------------.v---~
fee)

I / / :
I. / / /1

e e
 b~
Date: / /

ASSVML

c 11<­

;.'

e: fee) ~ w

1VJe set of wo"ker"s willin

-::: -ArM'5 belief abou.t *'..L o.ve-~ 2rvc.tu(.:\;v·,~ of IrJDykUS

WvtD oc~ept el'\1pIDl(r'\1eVlf:

FirM'S bel,e,· Otl?DuJ (W~"' f

U(j lti,~ 0 V'ilYk~
oe/VIlAnet -wV' LaboV'":
jYOc
i I ,.1'". ".".,~' ~~I ,i/"'MWt.

\ Z (w) ::: If ttL 1

0 i /;oJ

\
I ::: r0, 00] \'f ;U~w

\ -- OC I-:f )It> W

\ y

~ " ("W
\ Labor PeMQVlcL) .

l3eliefs ~Ye.. covyec+

.I
 Date: / /

IYI tVle.. COlYlpetl+ive, \o.bo'f Market Model It:jr Ul'10brervetble, worker prod(.i£..+iv~
levels,
~

l •

______[w'" = E[e\ fCe) ~ ~/'jj _

eM pf\1.er
.z
rf JL = ep -=) E;q,uililoviulVl ;
J
V10 on.:, ""llvr~ tv be. ill"!Plo.1w,

~ of· -tW whole. popcdCthOVI

E:CT.) .:;- 0 (poplA.\atitiY\ Mentye.)

(7 > '('

..fl CW Il )
= [e
----- .--'- --'-, - , e] 'If w>/r ~ V" ~~'--~----'-----'-~~~~~~~~~-

( JL Cw*) --;-----¢--.-------~.--- "_'...:.,-_l_f----'w'---*~<~Y"~~~~~~~~~_

(
.
\1'
"V'
" el'lrt'/

=.7 I .......
none o.ccepts ~ ". i \ : -\ij
~/_"I E.(I~) 2 1/

~(d>
"-"- .. ~... ---~~

- l]IYlU Pate-to opthvw.i ;-:111 : All wo...-kers t"/ e € [V', G] ghou.!01 be eMpioye.d.
- '.I:'VI.eq,u,llikJ'u(V1) <2i1~e{ +'00 (V1[l1'1¥ !-'roo few peop«- Ore. e(\lipli?lfe.(~ at- fj,()v1.!>

- 'TItu.- iVlCtI/<.<t 'IS to'1c(,/J-Q. tv t?i\oc.ute. \dO~jr-4!Y eff-it,ieVl·t/,{ io,4v gYMS .& hOM/.- (1r:Dduc,hO'Vl
c'. '\iN... e4\..41~il7ri)/fvI 'is ';fleHlti,eVlC!.f
 Date: / /

DpHMoJ. AlIocatkm
Ar.sVMl.,, eve"10fle, \t1Cls.ftJe so..fY1e Y"
\-tOM e. f'lrM~

"•
I
I-
I ,
!2 11 'f ~ e

\...

/
,
ra~e 1 : Lf tVleve C!1(e, MM'I Gl VlovkefS
I

w~.., eia] <. r

Nottk € [e J dtp=e'{l(j--""---,,-~--,,O:....:...(\_F-=-C-=-e)=---- _

fee)

......,.­
/' \
I
I

V ,,
- ... A
~

9
 Gei1~ C£C:Y-- . l) (;C f~ b3 )
Date: / /
£e>< 2. L-e+ '(' vCt I'i es w e
.=-) it e t -;;j 'v(f:?lL
; '\
good at VlOVV- qoo'c1 itt !'lord

.!:J
""DYkea' WAo Cde, (\i\(J'(et P-ooll.Lc.tive o..t fiiM! ave, also MOY'£,. procluc.tlve. elf hOMe.
9Qi€;!V optiMCJ. AllOCCdiOY\ hat eVfl'1 'v'iDvl<el'" -type ef\1ployea ~ a -ArM.

AS\lAML) fee) > 0 veE[e.e]

. .
~

•fA
:: E [611 run L w]
~ ne)]
rV1 e lAi libvilA/Vl ' f e ne) ~ w>J<

~\l ....
. cl'i vl011'C
I)t/ 'il'" .f;\f'II,II \Q5>
'S'(0
0 \ni~
",0'00 ./ vo'
i'r <>
. .~Sf;\ o.s ~
~ ,..17 \ ((8) ; V"
- ~t~

(I7.tt MfAy l'tAe.tH. w> J;ce)

4MU. ree) (J VI hL~"e iw S((Me ()l1i ~ 7
r(~)
~ W... \"eo CUVl corv'pcue \VII'I tWNl.
1rJ 1

~M()"
'i}u.. eqi,tilibriUfVl is III efflci ell1+.

rf w = "(en -=) Onl

WI/. ~. fee) -;;) Ev -,:) [;[171 = f elf)6(~,e~

;
a#etIVl.{Ih),J(
, , .
\/i\l,.\J;,,'t- ·thlS
 10

Date: / /

'I
, I

E~ - - - - - - - - - - - - - ­

e -
w

.
Ut'1iqve. gpNe ;:::; the hiG~est competitive equ'dibYilANl "". (,.!;

The (e. wil\ be. ()Yll

.r=::-------..-------.. ­

go{lAtion~ it> Mv~rre ~~1 el.!.- '-ti- '-·o-=-n- '-P=- - r 7. : :. . : . .bl=e- '-M.:.:. -~"_\~" -------:7""'''--------,----­

1.') "5; Y'lClli " '7

'2.') "
GCfeeVli

--,.-'
 =1-/
Date: 11 / g / oq

ere\V(0) ~ w]

w
1-,

c) gi~na\in91-- _
-+ to.keg Qlace Wt1en iVle, hlforNlecl P~(-ry mkeS 0. costl,,! tlCtiOVl 'IV) an a:t t el"1pt +0
I Convel.( #-Ie Info.
ey. _ PI UMS I.. veMO~S
 Date: / /

-------1 ell > e L

> oJ~------------------
_ _ _ _·-=...:...L~)_'_______l~rob (e = eH ) == A] '-- _
ltJIJere, ).. € (0,1)

>t
C (;, ~) :: cost of obWiVl;t19 i3tilCA (eve-! ~ fOY 0. type e WOYKe'f

de -::: c.. (e 8) > 0 - .C \ 'IF At

I ae

_________ \-+---.=-:Ol::-::ZC~_-:::.-----=..!Ce""-t~(e=-+-=e'--'~)'_________'>_.--=.0 _
) eJeoe.
\fe.>o <:

_ _ _ _ _ _ _--+-------:Ci::-:C~-=----=C=
... -'-'(e.~..>£...<.- _ _---,L--~_~
e') _<-=------_O MIC j,L-.C...·I~_· =9..+-t _
\. C)e

U'lirl~ of ·twe e c/;lOO5f.'1 &d.u i@veL e

s.. teC.i!IVI1 IcJ

_ _ _ _ _V----')_t!C9,) = fie") = 0
Bo-l1A t4Pe. ho.v£, (eSe1VD..tlitl \rIq).ts
lr-------------­
~ 0
 Date: / /

I
•
Ufli uiliQviulVl;

J flY) II S S-Ml"'t~'f: VotJle

~ A <;,et of ~~t iu s.. 0. be-litf fUn ( , P e if

FilN\'S ~~Iief of worker' e ':::: Prob. #tttt workey is

-------G(e) : :(e18 H + [,- }«el~ _

It V~
Wf.t9.. -it/1M­
nrMS of-fer

..
 -:t4

Date: / /

\f\i
4- /lA. G1IJtVl .V. 0 W ',no.iff€fenet e,uyv~

e lol ./
/ v. :. w- c- (e,)
~ ~
/ ' - \t4(.e,) glope: , d.w -
- c~(e)
el- I d.e. ..:J
"'0

alc<+tu)
Not~/ 1htt Slope. \ sgMcd1ev' toy" tke-\tti'1 ~ey' ivtpe.

g~nCL U(w~e.) - \N - CCe,B)

/cA
- i g~l<IeJ
etL.l - / 2llA.
l_?Jw '
dw -+ / dU. cit
\.?>~)
= 0
\\
II
- (1) dlrJ + [-C;(e,ln] o.e ':= 0
~

~~ c~ Ce, g) 'f(,lJ!.,. s'lope of Ie

1
II

tee Ce ,e) .(. 0

c~(e, eM) ~

res ot' o\IHU€ V lt \rIoYKey types ClOSS 01111( Dnu

\ :::: c' (e e) decreus l IV1 e

e e

 Date: / /

_'f_ C; Se.pam.ti()8 E4tAili~v1lA(VJ

-') is. an equ-,rlbviufYI "II') tJAiclt\ diffe(eV\r- i\tpes of' workers Clttoos.e.­

l-M e·U;l) -= worker'S equilibriuM eetlA. tVtoiu as lA funC-h·oYl of' hey type.
w'"'Cf,) = ~i(fYlS' eq,LAHi b¥i\A/Yl vv~ offer as 0 -hmcA'lQY) of
lrJorke(IS eoll.t levee
~

lerYIMo.1: 1V\ ().f1'j £tpam-til')-'-i9'f--P_8--=&---;,'-- _

_ _ _ _ _ _ _ _ _ _w.:....:........tI-[e"'CeH)]__::::_=S.l:L
H _

_ _ _ _ _ _ _ _ _ _&------'w_~ [e\eL)]__-_--=e'-"L~ _

50G~ wovke( -ntp.e veceive- 0.. w~ .equa-l-\o VliS productivH'1 leve.{.

We COl1nee-t beli€.-tl.
 Date: / /

j\. .jA-{e) ;:::. 1

-\WI\' e/{thA) is Ot IfI etj,lI."\il.N1\11v'1

/4

= Low - o..bi liN \;'Joyv.ev clttoose~ no ed-lAo

offeY' \;1/ :::: 61­

=' Vv~ ~c<t low-oloi Ii~ vJov'kev 011\ ~Q.,1" If) o.'(I~ ~epo.fZ\\1"5 ~gt.. ,

SI'i1(.R.. edlA is costh-t, low- Ctb·,li~. \Alc>vkev IS bettev C\r)o~\n8 Y10 eOLA. level
 w1:(o) _ (),_ 9-':}­
"«(0) =­ 0
ACe) -:;- i v/'t8') - eft Date: 2'1- / '3 / oq
w

ell ------­ \NQnt to cU."ia:t e ~ pOlnt g

e~
L - e"H
;,.M0Yl -h'nv1S obseive, e ~ D >e/.-CG Ii ) 2') }ACe) W-VI be (ll'lyyltl'tj as lOnij i{Slt doe~11'f c1u:-tm<ftt'tIS 0i(,\-,li\:>Y\:AM

{) me gl0 n oJ. I~ fnforMQ:nve g, Tt sepa~te-c ttu. 2 tv pes .

:9) The fiJtl\ In£, equilib.1UNl Paretv-oloil'1"lfll1te-S aU th.£.- gepa~ti(1fl equ'rlib-J'tt

to) The VlO-Si~YlcJ. e~U'd;'offWV1 tCM also PClf'e-to-cto(VIi{\a,te~ eOl'Vle of

- - ------,
- -
'V) Sau-l\i~tiutV\ eetu, tl.10·ICe~ r e~(eH) 6 (e., e.)
 I -

Date: Ii / r; / O~
") "'l"-, Ii I>i \.Itvl beli ef: j )lCel
;a
w"'ce) - eb
el-l-el,.
.....
-------­
1
•
w"ce)
t
~(.jljbnvf\ll

Note~/ Srnc.,l w"ce) 6 [e~}ef:'J>__------------

~

_ _ _ _ _ _ _ _ _ _ _ _--I-ft,-'-"'c.o...:e--'-)--'e~[o,11 J \J e~ 0

_ _ _ _ _ _-+ft:....:..-[e,~(eH)] ~ 1

_ _ _ _ _ _ _...,L:.M:..:..-[e~(e,) ~ o].-----~____=o,______'----- _

Blgn...-abi \'1+'1 \j\lDvke v is lM11l1 tv @et useless eO.l.ttO..-hon SiMpllf tv Si9Y1Ct\

to fifMS thOJ the,! CAfe of' hi5V\~Qb'd"t'l'

he ~(Q.telllGts I l-/'e wolAAcJ. ~t

t1N.. MOff, lAtilih-t Vu, ~+r.
 =t-1
Date: 11 / '3 / ocr

_L

O· e' r.­
e; e e'f
e
I' ~

eJ'Ce\l) "'!
?O;!\v-J(.v:d\NL
~
Sl'oet y(e~) "" 1"(9",)
cf e,*(0 H )

lA(W,e,) ;
If

\}..\ol(9",O) > ().H (fJti , e )

Po'r1-.t A Po'tf\t ~

lA H (el.,O) :: "
UI'l (eH 7 e)

·f\,ro.j- A (lOlot C- -=-) e" ::. ~ V1i1~est ed-v. leve.(.

#1ur GH woYkt~ Vvlll not

\).1.(61: 1 0) <: Vl.j.Ce H, e') olL-vl'ate,.

PomtA Poirrt-D o'\'W,vV"f~1 ~/II ~ lWei uh"7

.-
LA.1.(el..,O) - uL(eH,e) ?") e = tk. l()we~t ~AA IllveL tfAAt
pOint A Po/rrte (;1.!rJoik..e,r Ml\ notottvitAtt.,
 fa
Date: I /
7

.......

---w~e)

o e- e
II
li

_------',,'-----'-'----"'?-=lJ.t-'------'--',f'-------'~__'__(_fVl:__'_'~~o\:;>::....'!s'_"_tvv'__'_""e______'='e'___'*(=e_n..H)'---,-_»~~,~fi[e"Celt)J -::: i -;;;) (,·/Te,*w,,~:: f:1 H

____ ':- oJ
-"------==_=io-..,,...,,~--no---:.---.2::--+-----::O-)'-_I__.){[e\l(eL) ;: :. 0 ::=") w\(» = rat..
('" except pOIM A ... I;)
For e* of.f~ Bqu,\i1Yiv'l'Yl patC1, W"'(e-) can be al1lf1i1Mj 9 \a..t-t '1(1 tftu- \fl1-e-NMCElH e.. ). j

or. loYlB (;l! It \{'iii\ not ifl()l.t(..t. 0 oevilAh'OY1 '

 Date: / /
7
w

I I
I I ...
oI, e, re
I"
e:\
e:z,
=(_/Ii

______:t_f__e_'/o(.::...:e"-"H'-'-)_-_-_e~1_ _:::o_~_ ____'____v/·~-=----"-e-"'-..a _

~
_~ ~_=:..;GVJ:...:.>Q<.l!,o""-'~I-'-'-!1@ tVJat e'/oCe ld ) 1'v.~

~L) e*CSH) CanVlo-t be o.~OIle. ei J (,,) LA\1:V ') 1-1 _

bi, eM wovkeV' irlould.. pre-feV' tv ~e--t no e:etu') eveVl It: -ti1iS will

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Date: / /

. A') Median YoreV'

~ is a voteV'" ~VlCV\ tVJlA.t tYle VWM bey of people hYlO we-feY' to V/o.ve

Wilo wefef' less of~ public cgood.

-------r~ (,l,lG) - g,G: f---------------

/
&'2,. / ' 1
i ...
or _

1. v

If 00lit protilAUS o.t G, =) (\!lost peop4 (rVlore fhoYl hcdf) vote- tv ~ j)Alo\ic. q~

Most of tW" tlMeg G"([) IS not ef-RcieVl+?

 113
Date: / /

Jf 1).; [&) > gr =:) aaeVlt ~ NbheS -to t6

It'i (6) <: !h ) a~Vlt i, wi (VtLS to 1 G-
/
I), C&) - Sj =::) I1%Vlt- i is satiSfied wIth -tW. eu-rreV\t G.

FOC: [l,.l;CG-) -~i - 0 1-------------

~ rf' OtjeVlt M is *u. Med.i Ctv\' votev

LtA~(&v) = ~M l-------------
~

tVJat wantS to t Of ~r--!'G"'------ _

(' [Vlostt<-r;> it IJ not e-fh'c ;evtt 2.

 1/4-
Date: 1 / 4 / 0 0,

"-:¥ @ L·'nc(Olh\ A\loca1ion~

-? guppoJe tho.t \JIll!" ffl.j to s;uppDvt OfVl efBcieVlt ollocation of iVJe

lY1e~e pd(..(.,s s\rloulcL be Sl,{c,V\ -r\tliAt eCtclr! a~ent VIO- IVlCtl<-IMoI211 &t,(6J~J
t;ubject -\0 ),k', + ftG -;: W.

d = LA.((;,).{) - >- (y, + p.G- - WI;)

'FOe,; 'Ci';/..
~6-
- dLl.;
~G-
f. 'P. - 0
;;IV<"
R -= ~
a - ?" vi
dU"
d;!...
;;l)(,
- dLAi,
";)}(,
1\ - 0 ~.:

± 1
,,\,I,l Gi, ")l'j OOt(6~}tf)
0)-(, "d)\.2

______ b- T?=, \_rv_l(2. _£'- - ~

_-_. -11 -for N ~ '2.
\
 ---------------------

Date: / /

(l'1ot \?f"l?vi~)

(p(f')vic(£.)
 Date: / /
N

It \£ efficient tv p(i:lvick -me- public aood.. jf V

- Iv. ~ 0
N

- L, S, )- 1

&rt've~ - Clttrke To.x

/'

1f ~ p\..tblt'c qooet \5 provicte..et•

.g
'*J
- rf ~
Nj
b·
J
-< 0 =)

rf- 2..b:
totJ d
> 0 -')

Ag~l1t LiS pOlYClf'f :

Pttyoff t-o L :: Vi. + '2 b· it b·, + .~ b·
'~J
~ 0 7
o . if b, + '2 b· < 0
"*J

L tv fell
 (19-
Date: / /

e'/-.
:=
1Vlefe., O(f;; '3 peC1'ufl& ; . A) 13: C
fA := 20 C = C/o I/A :::: -10
~ -;;.) \
'I v· =LD >0
'{(3 ~ 30 'ji == ::L..;, v~ I/a ':::
0 . L
.}'\
/
"'c -:: 50 Vc- = 20 ~houlr-J @(Pi/I'd..<..
tw. p~bijC'30pd.
Quppose./ A ClMvlB -rell t!'Je. trutn.
'Wlo G'S vepoY+,

=> "Z J.;;1.

• L
:= - 10 + 0 -+ 20 > 0

-:::: 10

thtVJ 1 CiS net benefi t = 10 -10 = 10 > 0

~) 2: b, -= -10-+0 -+.5 L.. 0

". G \1'1111 (Jot &V1a.Vlge -H1e ~uPP\lf decision (no ~upplL() .

CWIc1 C ~eA! VlotVti~.

Pivom.l ~vid.uA,l j N

~ (;ocV\ pivoto.l-lndiviollAal j pO<l/S ~ +0..>< of f Z. 0, \

L'i'J

~ h 0.. persoYl Wnose- bid 0l cVtMges tlt1e wp,PIV deciSion

 !lcf
Date: / /

w!'> ~ 100

4V1e pO'1rvtent of pUbl ic ~OOO(.

(j,i, ").€A -t 2.(7 - 100

z: ~ (1DO-2.G-) 6- G- :: 25

-2 + '1 o
~
G = lb
 Date: /

-~~-:..:+,-----_&=----_:::------,g;J-.,-I---!+-9~hz;r---99-------,-l}-",g_::: .>L2~O _

fv1.o.~ U.... (x:A~&)

--~';;;~:;;;;'G~.=-_:::.,d:,.....;;,;,....--..:--~A=---,[ ~:J~i&) + ~~l,---=--=O,-----------

\'
-1

MflS :. )(,41 2
G-
1 1.
2.ffi
- 1 - :2
2~
:XI+ : 1- ..1-
~ 2]6.

XA := G- JG
2
'l<f!, =. 0Jo-XIr-G-

- ~O - Q! _~) _(;
- ZOO - 'ZG + Jr;
'2
~

lid. )("1 Go-} = x: IT, -+ JG: - 5°

- 0 00 -2-G + ~) + J& :: 5>0

- 200 - 2 G. + ~ J& = 60
2-
15V - '2& -+--;J6. ::: Q
z..
~

ge+ Glt
_ (~ EX~fr1o.\ihf

--') j <; De cost I benefit <Imposed. ()'pOI1 £omeoY1e.- b.f a c,fIOYl g ffi,Kev1 bLf otlt1€fJ

~,1 COYlruMev" A is tte(veIJe,llj Cl-ffe6t€ct' by fjY/YlS' hhDproolue...e. poUl,diM.

_ _ _ _ _ _ _ _ _----'-f...:....:lo--"(,IIi--"e:..:.......:y~ avoUV\. =) PoSi-h've. ~ie( tlaAi!l.t

el 1 AVl tlpple.- orc,hard locat-eet f1ext to a ott kupeY'"

4 Po~iHve Prool E:'JOt-e~'(_t1..:....:at_i1vr.:.=.f---
M
_

'€';e 'Z A .flS'nev1.f CCtyes about -tW.. tlMt of polllAttlnh dUMpeet Into

_ _ _....:....?o::....:!$i-Hve EKteft1o.lH-y
~ an qx:t<?(YI all\{ jfYlpOs..ed- cost

1m pmvecl hC\. \:;lihl fhM '(ecfuu. ace icitvrt nS k.s;

De. plecwC<l1t coI00Y1e. .
 /22
Date: / /
 {2g,.
Date: / /

0k1e(~ dC 1 ()(.y) > 0 dC2.C'l.Y) > 0

Ol){ ~'i:

oe l (X,4) < 0 7I C>C2.Cl.Y) > 0 I

. 2)'1 " fj d\j
*
}

l2J) A'orenceof PollLtti 0.-'1 tonwlling,......J(v1'--'-"-'ec,""'n=a=t1=i-=''--t'Vl _

fo( "ArM1 : Max 'Ii 1 (}t, y) -= p>-<),( ~ CduJy)

d'Ti 1
2))(
- PI-!. - ~
C>){.
- Q :::::-') Pino( ),til-

C>1T1 -== -dCd = 0 .-:.') -fir"" jl.AS+ leCllle, y

~y dlJ Cnof -(hit fo( it)

o p% -;::.
fVl C'l;
~

Pi!: ::;. dCz(l?':J)

,I 3Z

/Vat ~ O()Yl C<. be. effie i ell\t

 Date: q / tt / 0'1

cost of PO\lutiOVl. ~~

8'i1 -=- p~ - dC1 - 0

d\-t ~}.{

~'iT P - dCz - () ca VI solve, toy )-fl-. lI- ':l"-

~t ~"lc-

0l'iT = - dC1 - de - 0
~\:l 'CI':J ~Ij

~;~ - ~i f
1\01
\
tbsr-of 1 pol!u!lQYl .-., teVle-fj+ In .1 pol/uhO n
II
(Fi\m1'5 ,viC- of Jt po/lutlOYl) ( F;rlVl 2'S f-1C Ot pOlllAhC'l-l)

v) EffJ'cieYlCt{ by rVlh1)dudng Market .£0... Pollution

~ El(terncJi~ cv~C<.tes 'l()efficieVlt~

II
VlO+" COUVlt" poilu t7011 lY1 -riAL {V1ClV ket

-the levet ot pollu+loV1.

 Date: / /

e.9. 'FirM '.2 L'ClI'l be giveVl -the (Ie ht to pollucU- g C<ble to (ell -ti1is dent to h'rM1-

oil u. ti On -==

e .1, FirM 1. IS oiveV\ the (j ht t sell

()

dll1 -:::. - dC. - p'! - 0

dy C)'j
~

r P,
=-
.J
- dC,("ll,I1)
d'1 t
~'lVd
Pollu-titm D.elVla"d
fr ON] 'h'r 1..
(V]

'For Fir(Y1 z;

3Uz. -dez -I- Py 0

~I:J ~lj
~
\Zl'1V1'f
P'I - qC;~<-,~) ] pon(.(~,8(,(ppl'l
1
EqpilibrlwVl OlVlDtAnt of )(, y, c S'atiS't'y

Q.; P~ ::. 'dcz.(czy)

d~

3) [py - (;iC1 ().e,Y)

31j
- oCz (Zo,':D
d~
 Date: / /

(t,£',) Assu(Vle }

Q, \s V1oYll,;l'iIOkev-.

UA l ).(A~ g) 1/\;V1€ ve., (3UA > 0 CtVloL ~lAA > 0

/' .'\ C}}.{A ~S
qooet ~Mcke leveA
(!Pfl\lf'

\Ad'llSl S) vNlUe, 'dUa >0 CWtct dUg < 0

a~G as

d<t Q)lA.A AP", 0 1

d)..(A Ol)(A
T Mt2~4 -:::: -
dUA
0)1,.
~IM
= PI(
Ps
'd'i - 'dUll -AP.s - 0 -as

b '( 13: Me\)( I).

.::5
:., \3 will use.. ~lt 'ft;u.. IYlCOMe.. +0 eOYlSVf1'12:
-------------------- ----~-

/21-
Date: / /

Case 2 : Marke+ .roY" PoUUtlOr'l

f:uppore,
~ elAV1 sell -this viQht to A at a pna of (? pe v unit of S.
foy A:

________ ------"~=____::=:
_ ___"l.A=A__"_().(:....:!A'__T]"'-'S)L-+-'------'-A~[WA - P~ ~A - CPr +6) SJ _
';) 'j. == d LM - A9~ - 0 )

- A(P<+6) = 0

'ci :::: 1A~(),('3 ,S) -+ A [v-Jg+(?S - P>-<}('e]f- _

d't- dUll, A P" 0 J
-: _Pj.( 7
f-> f
as as
 I.£-O

Date: / /

= ~ )(".S
:::: ~. 1 S
10

- 1 LvA :::: 20
::: 2 I &ve. =' 20

Fay A: et - ~ ).f"g + A. [20 - (1) UA - 2S]

1
2

20 - (1) 2$ + Q.. S -) S = 5
)-(,+:::' 10

fOY B ~

_ _--'-------'rl'--=o'-'-y....!.A-'----L.: _-,-":£",,,-,,_=_--,-J),f.:..:.f1,,--,S,,------+-----,A<-::....[ 20 - ~A - ('2. + (:,) ~ ],..-- _

'd;iA =
~).(A

C).iA
S;
2 [).(,,5 ~ D 1
)f(A
~s. 2':1)(,,$
Fol'" 1;s : ,;:if!, - ~ - .1S +
10
).. [2.0 + (?S - (1) ).('g]
();lp.,
- 1 :::: 0
d){~ 2.1){Il
MRS = 5
,rn;;
1
~
g.tG - O' .,)£
s
~ ::. ,[)ig
-5
~
 /29
Date: / /

v-JA = P>-t ),fA + (Ps + ~ ) s

20 =: (1) (tt-t(?)g + ( '2.-T~)S

'u> ::=- 'fL ('2..+¢»S

g :::: 10 ""-
2+(!J
"'; 10 - Q..5(!; - 2-0
I
2--tfJ (b
wG -t I2S
I
~
gt),(e,

20 +(bS = (11 2.-5 (?

2-

7
? to - (2+~) (U12 -Z:)
s =: 25 .(I;> - 20
~
2.-W ==
10 g-
5f) (2- %
5
± '2S(? -
~ 1e
~

\/ (!7
v
 1'30
Date: / /

for .$ : fv\.lXX '11$ =- ~s S - Cs U,)(.)

ll-
\'2. - '2 S· S ::: b

2 ('Vt-4-J ~ 0

rOY f:
~. ~

\O-1.-f-)-{ = 0 -:) f' = ~

No, <'

dll - 17.-'25 o -) s~ -:: b

~s

'd'll ~ 10- '2..f-}(. - 0 ,) \0 -){ ;;::;

f
~ 2-

-:") - 2. C"l-f. - t+) -::c t

 (Sf
Date: / /

1)\£.vljl jQ-~ -- - Q. C}.{-'-f)

2-

IO-),t - -L\-),(+ Ib

)"Yt - 10
lIr
)( -:::: 'l
f~ =: 4-

'2- 2.
- \'2.. S - S - (Y{-4-) - P~){-

fur. F: {v\Cl')( 'i\ F - PFf - CF(f~){) + Px).{

- lof- f'2._ x f + p~)..{

'd'llF' ::: to-2f-Y( - 0 =) f::=. IO-).f

~f z.

d'ilF = -f + p).(. - 0 ~) I P>t: := f']

~).{

IS li\t~UM ~ D~ -:: S
.16 \l :::
0 -'2C~-l.f') '" -F
9'" ::;.
4 - (2 C),(-t.fJ :::. LO-).(
ul!- Z
::: 2. -4~+ll.o -= lO-).{

~'I" ::; 1-
f~ ~ 'f