Eric Maskin Government Quotations

What we mean by an outcome will naturally depend on the context. Thus, for a government charged with delivering public goods, an outcome will consist of the quantities provided of such goods as intercity highways, national defense and security, environmental protection, and public education together with the arrangements by which they are financed.

If banks anticipate government will come to the rescue should the credit market go badly awry, they may make loans that would otherwise be imprudent, e.g. subprime loans with little prospect of repayment.