Weitzman (1998) showed that when future interest rates are uncertain, using the expected net present value implies a term structure of discount rates that is decreasing to the smallest possible interest rate. On the contrary, using the expected net future value criterion implies an increasing...

I derive a simple closed-form formula for the optimal tax on addictive goods when consumers with hyperbolic time preferences erroneously and naïvely believe that they will go through with the consumption plan they devise in the present. In the literature, this problem is well studied for...

This paper extends the standard model of optimum commodity taxation (Ramsey (1927) and Diamond-Mirrlees (1971)) to a competitive economy in which some markets are inefficient due to asymmetric information. As in most insurance markets, consumers impose varying costs on suppliers but firms cannot...