In the presence of temptation and self-control preferences as in Gul and Pesendorfer, the optimal policy is to subsidize savings when consumers are tempted by "excessive" impatience (Krusell, Kuruscu and Smith, 2010). However, in the homogeneous agents model, taxation loses an important property...

We construct a model of endogenous investment specific techological change in which the stock of public capital influences the real price of capital goods. We show that the growth and welfare maximizing tax rates coincide in the planned economy. When factor income taxes finance public investment...

Ordinarily, the process of decision making by a committee through voting is modelled by a monotonic game the range of whose characteristic function is restricted to {0,1}. The decision rule that governs the collective action of a voting body induces a hierarchy in the set of players in terms of...

This paper characterizes an intergenerational welfare state with endogenous education and pension choice under general equilibrium-probabilistic voting. We show that politically implementing public education program always increases the future human capital, but this higher future human capital...

In many countries, the process of obtaining government approval for different projects involves interaction with multiple government agencies at various levels. This often makes the approval process inefficient by unnecessary lengthening it. In this paper we study the effect of a re-organization...