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Why are public-sector workers so heavily compensated with pensions and other non-pecuniary benefits? In this paper, we present a political economy model of shrouded compensation in which politicians compete for taxpayers' and public employees' votes by promising compensation packages, but some...
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Does bounded rationality make paternalism more attractive? This Essay argues that errors will be larger when suppliers … comparative statics suggest that bounded rationality will often increase the costs of government decisionmaking relative to …
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