Revealing preferences by observed action or by announcement. For example, a public good is non-rivalrous and non-excludable, so an individually rational consumer will have no incentive to reveal their true preferences: the consumer can overstate demand (when additional public good is perceived to be costless) or understate demand (when the public good has a cost and the consumer hopes someone else will choose to pay). In some circumstances mechanism design can be used to construct a link between payment and provision that gives every consumer an incentive to reveal true preferences for public good and thereby allow provision at the efficient level. For local public goods, the Tiebout hypothesis argues that preference revelation will take place by consumers moving to their most preferred jurisdiction. The problem of preference revelation also arises in attempts to discover individuals’ valuations of the environment; they have an incentive to overstate when there is no cost implication.