Optimal linear and non-linear taxation models represent the ends of a spectrum of constraints on feasible tax systems. The continuum in between is little explored, despite the fact that nonlinear taxation Pareto dominates linear taxation, but linear taxation is the more common. The same is true...

A volume of recent experimental evidence suggests that individual preferences may not be independent of the consumer's vantage point. In particular agents may suffer from loss aversion (also known as the endowment effect and status quo bias). Allocations which appear desirable ex ante may...

A theory is proposed in which preferences are conditional on reference points. It is related to Tversky and Kahneman’s reference-dependent preference theory, but is simpler and deviates less from conventional consumer theory. Preferences conditional on any given reference point satisfy...