Socially optimal procurement with tight budgets and rationing

We investigate the behaviour of a social planner that secures the supply of a good, e.g. an environmental benefit, through contracting with private agents. While the social planner seeks to maximise net social benefits, she is also controlled with a fixed budget. Private agents are profit maximising and hold private information concerning their variable costs of production. They also have known fixed costs of contracting. We find that budget constraints and fixed costs change the optimal contract design in more than one way: the social planner minimises costs, rations high-cost contracts to reduce fixed costs and information rents, and distorts contracts for all agent types, including low-cost agents. We find that rationing improves social welfare. Also, even though social costs – including tax distortion – are explicitly taken into consideration, they do not affect the design of optimal contracts when budgets are tight. In those cases the budget constraint dominates the solution.     

Optimal social security tax with myopic agents

Myopic agents lack the foresight to save for their own old age. It is generally believed that correcting myopia is a rationale for a pay-as-you-go (PAYG) pension system. This view has been supported by existing literature showing that the optimal PAYG social security tax should increase when people are more myopic. In this paper we obtain new results opposed to the traditional view. By establishing a very standard general equilibrium OLG model with myopic agents and endogenized marginal product of capital, we show that the optimal social security tax should be lower when people are more myopic. Our numerical analysis also shows that the welfare cost of the social security tax increases with people's degree of myopia. These results suggest that correcting myopia is not a clear rationale for the PAYG social security.     

Policy Discrimination with and without Interpersonal Comparisons of Utility

Can the Pareto criterion guide policymakers who do not know the true model of the economy? If policymakers specify ex ante preferences for agents, then Pareto improvements from a distorted status quo are usually possible, and with more commodities than states, one can implement almost every Pareto optimum. Unlike the standard second welfare theorem, planners cannot dictate allocations: agents must trade. Unfortunately ex ante preferences impose interpersonal comparisons. If policymakers merely aim to maximize some social welfare function then optimal policies form an open set; hence small changes in the environment do not necessitate any policy response. Planners with symmetric information about agents can sometimes intervene without making interpersonal comparisons.     

Independent random matching

Random matching models with a continuum population are widely used in economics to study environments where agents interact in small coalitions. This paper provides foundations to such models. In particular, the paper establishes an existence result for random matchings that are universal in the sense that certain desirable properties are satisfied for any assignment of types to agents. The result applies to infinitely many types of agents, thus covering random matching models which are currently used in the literature without a foundation. Furthermore, the paper provides conditions guaranteeing uniqueness of random matching.     

Public and Private Hospitals,Congestion, and Redistribution

This paper studies how congestion in the public health sector can be used as both an in‐kind and in‐cash redistributive tool. In our model, agents differ in productivity and they can obtain a health service either from a congested public hospital or from a noncongested private one at a higher price. With pure in‐kind redistribution, agents fail to internalize their impact on congestion, and the demand for the public hospital is higher than optimal. When productivities are not observable but the social planner can assign agents across hospitals, the optimal congestion is higher than in the full information case in order to relax incentive constraints and foster income redistribution. Finally, if agents can freely choose across hospitals, the optimal subsidy on the private hospital price may be negative or positive depending on the relative importance of redistribution and efficiency concerns. In this case, redistribution is limited if the quality of the public facility depends on the number of users.     

OTHER-REGARDING UZAWA PREFERENCES AND LIVING STANDARD CATCH-UP

This paper provides a new rationale for Uzawa preferences based on social choice; instead of positing that poor people are more patient because they are poor, it posits that poor people should be more patient if they wish their living standards to catch up with richer people. To provide a setting for this new rationale, the present paper studies the socially optimal choice of living standards over time by social planners for countries that, from low levels of total factor productivity (TFP), experience a gradual catch-up of their TFP level with that of the leader country. In the TFP catch-up scenario, the socially optimal choice of consumption and saving based on time additive preferences leads to no catch-up of living standards. To generate living standard catch-up we propose other-regarding Uzawa preferences, in which the rate of time preference is influenced by the gap in living standards between follower country and leader country. This other-regarding specification is consistent with recent findings emphasized in behavioural economics. The other-regarding Uzawa preferences form is illustrated quantitatively by simulating a model of the world economy.     

Is commodity taxation unfair?

In a model where agents have unequal skills and heterogeneous preferences about consumption goods and leisure, this paper studies how to combine commodity taxes and non-linear income tax. It proposes a particular social welfare function on the basis of fairness principles. It then derives a simple criterion for evaluating the social welfare consequences of various tax schedules. Under the proposed approach, the optimal tax should have no commodity tax for some range of consumptions, and income redistribution would feature high subsidies to the working poor. It is also shown that, even when the income tax fails to be optimal, commodity taxes may not improve social welfare.     

Optimal welfare and in-work benefits with search unemployment and observable abilities

This paper explores the optimal interaction between the tax system and social assistance in insuring people against the risks of involuntary unemployment and low ability. To that end, we introduce search unemployment in a model of optimal non-linear income taxation. The relationship between welfare benefits and the optimal level of in-work benefits is U-shaped. This explains why in-work benefits are called for both in countries that grant low welfare benefits and countries that provide high welfare benefits. An earned-income tax credit optimally induces all agents to look for work if job search is cheap and effective, agents are not very risk averse, and the least-skilled agents are relatively productive.     

Intergenerational preference differences and optimal national saving

This paper investigates the problem facing national planners who realize that their successors may employ different social welfare criteria for determining economic policies than they do. In such a situation, we show that the present planners may want to leave future generations a smaller capital stock than they would if they thought the stock would be managed in a way consistent with their own preferences. On the other hand, we also identify cases in which the opposite is true. We obtain the results by studying an optimal aggregate growth model the utility function of which changes randomly from one generation to the next. We analyze the model using a system of functional equations in place of the conventional Bellman equation from dynamic programming theory.     

Proposal power and majority rule in multilateral bargaining with costly recognition

This paper studies a sequential bargaining model in which agents expend efforts to be the proposer. In equilibrium, agents’ effort choices are influenced by the prize and cost effects. The (endogenous) prize is the difference between the residual surplus an agent obtains when he is the proposer and the payment he expects to receive when he is not. Main results include: (1) under the unanimity voting rule, two agents with equal marginal costs propose with equal probabilities, regardless of their time preferences; (2) under a nonunanimity rule, however, the more patient agent proposes with a greater probability; (3) while, under the unanimity rule, the social cost decreases in group heterogeneity, it can increase under a nonunanimity rule; and (4) when agents are identical, the unanimity rule is socially optimal.     

An impossibility result for virtual implementation with status quo

In this paper, virtual implementation is restricted to deliver, on the equilibrium path, either a socially optimal outcome or a status quo: an outcome fixed for all preference profiles. Under such a restriction, for any unanimous and implementable social choice function there is a dictator, who obtains her most preferable outcome as long as all agents prefer this outcome to the status quo. Further restrictions on the lottery space and the range of social choice functions allow the dictator to impose her most preferred outcome even when other agents prefer the status quo to this outcome.     

A glove-market partitioned matrix related to the assignment game

To any assignment market we associate the unique exact assignment game defined on the same set of agents and with a core that is a translation of the core of the initial market. As it happens with the core, the kernel and the nucleolus of an assignment game are proved to be the translation of the kernel and the nucleolus of its related exact assignment game by the vector of minimum core payoffs. Agents on each side of the market are classified by means of an equivalence relation and, when agents on the same class are ordered to be consecutive, the related exact assignment market is defined by a partitioned matrix, each block of the partition being a glove market.     

A glove-market partitioned matrix related to the assignment game

To any assignment market we associate the unique exact assignment game defined on the same set of agents and with a core that is a translation of the core of the initial market. As it happens with the core, the kernel and the nucleolus of an assignment game are proved to be the translation of the kernel and the nucleolus of its related exact assignment game by the vector of minimum core payoffs. Agents on each side of the market are classified by means of an equivalence relation and, when agents on the same class are ordered to be consecutive, the related exact assignment market is defined by a partitioned matrix, each block of the partition being a glove market.     

Help the Low Skilled or Let the Hardworking Thrive? A Study of Fairness in Optimal Income Taxation

In a model where agents have unequal wages and heterogeneous preferences, we study the optimal redistribution via an income tax, when the social objective is based on a combination of efficiency and fairness principles, and when incentive issues are taken into account. We show how some fairness principles entail specific features for the optimal taxes, such as progressivity or tax exemption for incomes below the minimum wage.     

Optimal Dynamic Taxation with Distinctive Forms of Social Status Attainment

We examine the role of both consumption‐ and wealth‐induced social comparisons in setting dynamic optimal income taxation. Under complete information, state‐invariant labor income taxes are used to remedy the externality caused by consumption‐induced social comparisons, while state‐contingent capital income taxes are used to remedy the externalities caused by both consumption‐ and wealth‐induced social comparisons. Under incomplete information, distinct types of agents are subject to an identical marginal capital income tax, which removes social comparisons. To solve the information problem, low‐productivity agents could be subject to a lower marginal labor tax than high‐productivity agents, which contradicts the traditional result in the Mirrlees–Stiglitz models.     

Screening consumers through alternative pricing mechanisms

This paper addresses the optimal design of optional nonlinear tariffs. Two particular solutions commonly used in telecommunications and other industries are fully characterized. These optimal outlay schedules illustrate how the tariff design is altered when there exists a time lag between tariff choice and consumption. In this model, consumers' uncertainty is resolved in the interim, between the tariff choice and the usage decision, through changes in their types. The paper studies whether the monopolist may profit from screening consumers according to different information sets, and it shows that expected profits are higher under an ex-post tariff if the variance of the ex-ante type distribution is large enough. The paper also shows that no results regarding social efficiency may be obtained in general. Welfare comparison of optional tariffs will be very sensitive to type distributions, how types enter demand specifications, and the relative variance of the type components.I wish to thank John Panzar for his guidance on the present research and, for his many suggestions over several endless discussions on this paper. I also thank Kyle Bagwell, Robert Porter, and Daniel Spulber for helpful comments and suggestions. Financial support from the Ministerio de Educación y Ciencia, Spain, is gratefully acknowledged.     

Optimal asset taxes in financial markets with aggregate uncertainty

This paper studies Pareto-optimal risk-sharing arrangements in a private information economy with aggregate uncertainty and ex ante heterogeneous agents. I show how to implement Pareto optima as equilibria when agents can trade claims to consumption contingent on aggregate shocks in financial markets. The first result is that if aggregate and idiosyncratic shocks are independent, the implementation of optimal allocations does not require any interventions in financial markets. This result can be extended to dynamic settings in the sense that, in this case, only savings need to be distorted, but not trades in financial markets. Second, I characterize optimal trading distortions in financial markets when aggregate and idiosyncratic shocks are not independent. In this case, optimal asset taxes must be higher for those securities that pay out in aggregate states in which consumption is more volatile. For instance, this can provide an efficiency justification for the frequently observed differential tax treatment of different asset classes, such as debt and equity claims.     

Optimal menu when agents make mistakes

This paper studies how an optimal menu chosen by a social planner depends on whether agents receive imperfect signals about their true tastes (imperfect self-knowledge) or the properties of available alternatives (imperfect information). Under imperfect self-knowledge, it is not optimal to offer fewer alternatives than the number of different tastes present in the population, unless noise is infinite (agents have no clue about their true preferences). As noise increases, the social planner offers menu items that are closer together (more similar). However, under imperfect information, as noise increases, it could be optimal to construct a menu with more distinct alternatives, restrict the number of options, or, for some finite noise, offer a single item.     

Task scheduling and moral hazard

We study a two-period moral hazard problem with risk-neutral and wealth-constrained agents and three identical tasks. We show that the allocation of tasks over time is important if there is a capacity constraint on the number of tasks that can be performed in one period. We characterize the optimal schedule of tasks over time and the optimal assignment of tasks to agents conditional on the outcomes of previous tasks. In particular, we show that delaying tasks is optimal if and only if the effect of an agent’s effort on the probability of success is relatively low. We have benefitted from helpful discussions with A. Roider, L. Samuelson, and U. Schweizer. The paper has been substantially improved due to the detailed and very valuable comments of an Associate Editor. Financial support by Deutsche Forschungsgemeinschaft, SFB/TR15, is gratefully acknowledged.     

基于创新主体视角的专利交易差异与区域网络研究

专利交易是创新主体回收研发成本、形成创新良性循环的重要途径。基于创新主体视角深入探讨专利交易差异及区域网络有利于不同创新主体制定差异化专利交易政策，从而加快实现创新引领经济高质量发展。采用统计分析法和社会网络分析法，以2018年中国专利许可与转让数据为研究对象，探讨各类创新主体专利交易差异与专利区域流动网络。研究发现:①不同类型创新主体专利交易特征不同，创新主体类型不同，相关专利特征也不同；②不同类型创新主体对区域经济的影响作用不同，高等院校和科研机构主要对当地经济发展产生积极影响，企业和个人则对多地甚至全国技术发展具有积极影响。因此，不同类型创新主体应整合内外部资源，通过合作研发扩大专利交易范围；政府应建立完善的专利交易评价体系和专利服务体系，推动科技成果转化与应用。研究结论有利于促进不同类型创新主体科技成果转化，为加快创新型国家建设提供参考。