This paper reexamines the design of the optimal lockdown strategy by paying attention to its robustness to the postulated social welfare criterion. We first characterize optimal lockdown under utilitarianism, and we show that this social criterion can, under some conditions, imply a COVID19...

This paper studies the implications of monopsony power for optimal income taxation and welfare. Firms observe workers’ abilities while the government does not and monopsony power determines what share of the labor market surplus is translated into profits. Monopsony power increases the tax...

Empirical welfare analyses often impose stringent parametric assumptions on individuals’ preferences and neglect unobserved preference heterogeneity. In this paper, we develop a framework to conduct individual and social welfare analysis for discrete choice that does not suffer from these...

We analyze the welfare implications of property taxation. Using a sufficient statistics approach, we show that the tax incidence depends on how housing prices, labor and other types of incomes as well as public services respond to property tax changes. Empirically, we exploit the German...

Using new data on linguistic diversity across and within countries, we examine novel channels though which language affects trade patterns and economic welfare. We find that linguistic similarity within a country accounts for about 10 percent of estimated ‘home bias’, demonstrating the...

We estimate the marginal external congestion cost of motor-vehicle travel for Rome, Italy, using a methodology that accounts for hypercongestion (a situation where congestion decreases a road’s throughput). We show that the external cost – even when roads are not hypercongested...

We consider a principal-agent relationship with adverse selection. Principals pay informational rents due to asymmetric information and sell their output in a homogeneous Cournot-oligopoly. We find that asymmetric information may mitigate or more than compensate the welfare reducing impact of...

The national income and product accounts double-count investment, which enters once when it occurs and again in present value when the cumulated capital leads to more rental income. From the perspective of resources available intertemporally for consumption, the double-counting issue implies...

We experimentally examine how the incentive to defect in a social dilemma affects conditional cooperation. In our first study we conduct online experiments in which subjects play eight Sequential Prisoner’s Dilemma games with payoffs systematically varied across games. We find that few second...

This study explores mechanism design with allocation-based social preferences. Agents’ social preferences and private payoffs are all subject to asymmetric information. We assume quasi-linear utility and independent types. We show how the asymmetry of information about agents’ social...