A simple in-class experiment on the efficient production of the pure public good touching the median voter theorem

Abstract

The paper show possibilities of introducing modern methods into public economy and finance teaching. We present in-class experiment which illustrates one of typical model from political economy – the median voter theorem. Students are endowed with cards that represent their preferences on different levels of the public good production. They compare benefit they can get from different levels of public good (these levels represent three candidates) and then they vote for the most preferred level. This process continues for several rounds, with a new election taking place with a different sample of students. The in-class experiment demonstrates that the simplicity of the median voter theorem, when there are more than two candidates, provides only an imprecise prediction of the collective choice.The methodology of the experiment is enriched by the statistical analysis of experimental results from experiment cartied out by the authors in Czech Republic and Slovakia.