Cost-benefit analysis (CBA) is used to optimize investment in public projects. In many countries, CBA is mandatory for the provision of most public services. However, once CBA is mandated, residents can strategically alter their behaviors based on a dynamic inconsistency in which the CBA-based...

Cost-benefit analysis (CBA) is considered as an effective means to avoid the government's failures of public projects. However, once CBA becomes mandatory and residents expect a public project to be established based upon it, there is the potential for a dynamic inconsistency problem to arise....