Tax and transfer programs transform before-tax income into after-tax income. Income is variable and the tax and transfer system is nonlinear-i.e., marginal tax rates vary. We show that, as a consequence, the tax and transfer system punishes (and rewards) income variability. We calculate the...

Search theory has provided a simple and robust laboratory that economic theorists have used to examine a wide variety of questions about the acquisition of information. Early work on search modeled an individual's searching decisions and drew inferences about the value of information and the...