Blackorby, Charles; Donaldson, David - In: American Economic Review 78 (1988) 4, pp. 691-700
This paper investigates second-best (transfers in kind) and third-best (subsidies and taxes) Pare to optima in a simple model were government lacks full information ab out consumer types (who is able, who is infirm). These Pareto optima rely on self-selection. The authors show that those...