This paper describes and elaborates a process first discovered by Edward H. Clarke that motivates individuals to reveal their true preferences for public goods. The essence of the process is that each individual is offered a chance to change the outcome that would occur without his vote by paying a special charge equal to the net cost to others that results from including his vote in the decision. Because the special charge on any one person is not paid to any other person, a very small budget surplus results. Applications to both discrete and continuous decisions are illustrated.

This paper describes and elaborates a process first discovered by Edward H. Clarke that motivates individuals to reveal their true preferences for public goods. The essence of the process is that each individual is offered a chance to change the outcome that would occur without his vote by paying a special charge equal to the net cost to others that results from including his vote in the decision. Because the special charge on any one person is not paid to any other person, a very small budget surplus results. Applications to both discrete and continuous decisions are illustrated.