Preference revelation
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In public choice theory, preference revelation (also preference revelation problem) is an area of study concerned with ascertaining the public's demand for public goods. then it is likely that public goods will be under- or over-supplied.
When there is no market to induce people to reveal their subjective valuations, economists say that there is a “problem of preference revelation.” When perfect compensation is possible in principle, it may be impossible in fact because of the problem of preference revelation
Overview
Unlike private goods, public goods are non-excludable and non-rivalrous. Given that information about marginal benefits is available only from the individuals themselves, people have an incentive to under report their valuation for public goods.
See also
