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...

We consider models where the Ramsey-optimal fiscal policy under Full Commitment (FC) is time-inconsistent and define a new notion of optimal policy, Limited-Time Commitment (LTC). Successive one-period lived governments can commit to future plans over a finite horizon. We provide a sufficient...

A flat tax rate on income has gained popularity in European countries. This paper assesses the attractiveness of such a flat tax in achieving redistributive objectives with the least cost to labour market performance. We do so by using a detailed applied general equilibrium model for the...

We propose a novel utility representation for preferences over risky timed outcomes. The weighted temporal utility model generalizes many well known utility functions for intertemporal decision making under risk. A decision maker with a weighted temporal utility function can have time consistent...

Many empirical studies on intertemporal choice report preference reversals in the sensethat a preference between a small reward to be received soon and a larger reward to bereceived later reverses as both rewards are equally delayed. Such preference reversals arecommonly interpreted as...

Most evidence of hyperbolic discounting is based on violations of either stationarity or time consistency as observed in choice experiments. These choice reversals may however also result from time-varying discount rates. Hyperbolic discounting is a plausible explanation for choice reversals...

It has been argued that urban planning policies, through minimum parking requirements, and income tax policies induce free employer parking. We show that tax policies induce welfare losses in the order of 12% of parking resource costs, implying an annual deadweight loss in the order of € 5...