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When a price is enough : implementation in optimal tax design

Renes, Sander; Zoutman, Floris T. - 2014

This paper studies the design of tax systems that implement a planner's second-best allocation in a market economy. An example shows that the widely used Mirrleesian (1976) tax system cannot implement all incentive-compatible allocations. Hammond's (1979) "principle of taxation" proves that any...

Persistent link: https://www.econbiz.de/10010403177

Optimal taxation with multiple incomes and types

Spiritus, Kevin; Lehmann, Etienne; Renes, Sander; … - 2022

We analyze the optimal nonlinear income tax schedule when taxpayers earn multiple incomes and differ along many unobserved dimensions. We derive the necessary conditions for the government's optimum using both a tax perturbation and a mechanism design approach, and show that both methods produce...

Persistent link: https://www.econbiz.de/10012817145

Fiscal policy with limited-time commitment

Clymo, Alex; Lanteri, Andrea - 2016

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 …, allowing FC Ramsey plans to be supported with a finite commitment horizon (often a single period). We relate the required …

Persistent link: https://www.econbiz.de/10011520532

Insurance and information : firms as a commitment device

Bovenberg, Ary Lans; Teulings, Coen N. - 2001

We explore the role of firms in insuring non-verifiable output. As a device that allows workers to commit to thedelivery of their output, the firm arises endogenously as an alternative to the market if workers are sufficiently riskaverse and the firm can base its incentive payments on good...

Persistent link: https://www.econbiz.de/10011316894

A theory on media bias and elections

Sun, Junze; Schram, Arthur; Sloof, Randolph - 2019

on whether media have commitment power; if not, they can worsen information transmission and voter welfare. …

Persistent link: https://www.econbiz.de/10012030647

Cycles and multiple equilibria in the market for durable lemons

Janssen, Maarten C. W.; Karamychev, Vladimir A. - 2000

We investigate the nature of market failure in a dynamic version of Akerlof (1970) where identical cohorts of a durable good enter the market over time. In the dynamic model, equilibria with qualitatively different properties emerge. Typically, in equilibria of the dynamic model, sellers with...

Persistent link: https://www.econbiz.de/10011303313

Continuous time trading in markets with adverse selection

Janssen, Maarten C. W.; Karamychev, Vladimir A. - 2000

We investigate the nature of the adverse selection problem in a market for adurable goodwhere trading and entry of new buyers and sellers takes place in continuoustime. In thecontinuous time model equilibria with properties that are qualitativelydifferent from thestatic equilibria, emerge....

Persistent link: https://www.econbiz.de/10011304379

Credit rationing effects of credit value-at-risk

Slijkerman, Jan Frederik; Smant, David Jan Cornelis; … - 2004

Banks provide risky loans to firms which have superior information regarding the quality of their projects. Due to asymmetric information the banks face the risk of adverse selection. Credit Value-at-Risk (CVaR) regulation counters the problem of low quality, i.e. high risk, loans and therefore...

Persistent link: https://www.econbiz.de/10011334832

Competition for a prize

Noll, Rob van der - 2006

I present a model in which individuals compete for a prize by choosing to apply or not. Abilities are private information and in attempt to select the best candidate, the committee compares applicants with an imperfect technology. The choice of application cost, size of the prize and use of...

Persistent link: https://www.econbiz.de/10011348717

Dynamic insurance and adverse selection

Janssen, Maarten C. W.; Karamychev, Vladimir A. - 2001

We take a dynamic perspective on insurance markets under adverseselection and study a generalized Rothschildand Stiglitz model where agents may differ with respect to theaccidental probability and their expenditure levels incase an accident occurs. We investigate the nature of dynamicinsurance...

Persistent link: https://www.econbiz.de/10011318577

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