This paper is concerned with tax policies designed to obtain an improved competitive allocation in the presence of consumption externalities. It is known that the full optimum can, in general, be attained only through the imposition of excise taxes at different levels for different individuals....

This paper presents a simple model of market equilibrium to explain why firms that maximize the value of their shares pay dividends even though the funds could instead be retained and subsequently distributed to shareholders in a way that would allow them to be taxed more favorably as capital...

This paper studies the sequence of short-run quantity-constrained equilibria of a model with a single storable output, labor and money. The durability of output gives rise to inventory fluctuations which influence the course of the equilibria attained. One special feature of interest is the...

A mathematical characterization of self-enforcing bilateral contracts is given. Contracts where both parties exercise some control over the quantity traded can sometimes be superior to contracts that rest control entirely with one side. Some qualitative characteristics of these contracts are given.

Our tax system was designed for an economy with little or no inflation. The current paper shows that inflation causes capricious changes in the effective rate of tax on capital income and therefore in the real net rate of return that savers receive. This is not only a temporary disequilibrium...

We present a method for evaluating the welfare of a decision maker, based on observed choice data. Unlike the standard economic theory of revealed preference, our method can be used whether or not the observed choices are rational. Paralleling the standard theory we present a model for choice...