Many optimal contracting papers use quasi-linear preferences. To exclude stochastic mechanisms they impose a (su cient) condition on how the curvature of an agent's objective function varies with type. We show with quasi-linear preferences that an optimal deterministic outcome without bunching...

In order to explore the optimal taxation of low-skilled labor, we extend the standard model of optimal non-linear income taxation in the presence of quasi-linear preferences in leisure by allowing for involuntary unemployment, job search and an exogenous welfare benefit. In trading off...

We investigate the empirical usefulness of a new measure of the degree of competition in a market, proposed by Boone (2000). This measure is based on the reduction in profits that firms experience as a result of cost inefficiencies. We compare this with measures commonly used by policy makers...