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Endogenous property rights, credit market, and economic development Journal of Public Economic Theory (IF 1.336) Pub Date : 2024-03-18 Niloy Bose, Richard Cothren, Nazanin Sedaghatkish
Empirical evidence suggests that credit markets can catalyze property rights reforms. We illustrate this in a theoretical framework where a borrower must expend costly effort to protect output from predation. We consider two possible equilibrium loan contracts. In the first, lenders leave the decision to protect output to borrowers. In the second, lenders set the standard of property protection as
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Positional and conformist effects in voluntary public good provision Journal of Public Economic Theory (IF 1.336) Pub Date : 2024-03-18 Francisco Cabo, Alain Jean‐Marie, Mabel Tidball
The literature featuring game–theoretical models aimed at explaining the effect of the status concerns on the voluntary provision of a public good is generally focused on snob agents, driven by a desire for exclusiveness. However, the social context literature highlights that status concerns can give rise to a desire, in some individuals to be different from the “common herd,” and in some others to
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Nash equilibria in models of fiscal competition with unemployment Journal of Public Economic Theory (IF 1.336) Pub Date : 2024-03-13 Yuya Kikuchi, Toshiki Tamai
This study examines two different fiscal competition games under labor market imperfections. Given that capital moves across regions and affects regional employment, governments must choose the expenditure level and tax rate on such mobile capital by accounting for the effects of fiscal variables on both capital and labor. Therefore, governments may play these games with either the tax rates on mobile
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Redistribution with needs Journal of Public Economic Theory (IF 1.336) Pub Date : 2024-02-23 Ricardo Martínez, Juan D. Moreno‐Ternero
We take an axiomatic approach to study redistribution problems when agents report income and needs. We formalize axioms reflecting ethical and operational principles such as additivity, impartiality and individual rationality. Different combinations of those axioms characterize three focal rules (laissez faire, full redistribution, and need‐adjusted full redistribution) as well as compromises among
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Licensing option to reduce rent extraction by the input supplier Journal of Public Economic Theory (IF 1.336) Pub Date : 2024-02-11 Kuo-Feng Kao, Arijit Mukherjee
It is well known that if the final goods producers adopt new technologies, the input suppliers with market power can extract more rent from the final goods producers by increasing the input prices. Higher rent extraction by the input supplier neither allows the licenser of the new technology to earn large profit nor helps welfare to increase much. In a model with an outside innovator (the licenser)
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Strategic interaction in the market for charitable donations: The role of public funding Journal of Public Economic Theory (IF 1.336) Pub Date : 2024-01-09 Rune Jansen Hagen, Jørn Rattsø
Government financing of charities influences their fundraising and private donations. To analyze competition between charities, we modify the model of fundraising introduced by Andreoni and Payne, where there are two groups of donors and two charities. We concentrate on warm-glow motivation for giving and highlight strategic interaction in the market for donations. The charities are output-maximizing
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Prospect equality: A force of redistribution Journal of Public Economic Theory (IF 1.336) Pub Date : 2024-01-07 Xiangyu Qu
Recent evidence demonstrates that the perceived, not the actual, level of income inequality influences the redistribution policy. The perception of inequality, as conceptualized in this paper, is closely related to both objective inequality and prospect equality. An axiomatic system of individual preferences is suggested and demonstrated to characterize an index of perceived inequality. Prospect equality
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Fertility, heterogeneity, and the Golden Rule Journal of Public Economic Theory (IF 1.336) Pub Date : 2023-11-30 Gregory Ponthiere
According to Phelps' Golden Rule, a rise in fertility decreases the optimal capital intensity, because a higher fertility increases the investment required to sustain a given capital intensity (the capital dilution effect). Using a matrix population model embedded in a two-period overlapping generation setting, we examine the robustness of that relationship to the partitioning of the population into
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Economies with rights: Efficiency and inequality Journal of Public Economic Theory (IF 1.336) Pub Date : 2023-11-23 Carlos Hervés-Beloso, Francisco Martínez-Concha, Emma Moreno-García
We consider a scenario where inequality levels originate harmful effects on society. To alleviate this negative externality, we introduce tradable consumption licenses within a general equilibrium framework to obtain efficient outcomes, reduce inequality, and improve social welfare. This mechanism would be easily implementable with the necessary support of the law.
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Risk, trust, and altruism in genetic data sharing Journal of Public Economic Theory (IF 1.336) Pub Date : 2023-11-23 Zeeshan Samad, Myrna Wooders, Bradley Malin, Yevgeniy Vorobeychik
How does concern about genetic data privacy compare with other concerns? We conduct behavioral experiments to compare risk attitudes towards sharing genetic data with a healthcare provider with risk attitudes towards sharing financial data with a money manager. Both scenarios involve identical decisions and monetary stakes, permitting us to focus on how the framing of data sharing influences attitudes
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Temptation and self-control for the impure benevolent planner: The case of heterogeneous discounting Journal of Public Economic Theory (IF 1.336) Pub Date : 2023-11-20 Takashi Hayashi, Noriaki Kiguchi, Norio Takeoka
This paper presents a “behavioral” model of a normative benevolent social planner, who faces a self-control problem when he/she is in charge of aggregating diverse and conflicting preferences of individuals. The model is presented in the context of aggregating preferences over intertemporal streams of social outcomes, in which Zuber and Jackson and Yariv have shown the impossibility of a time-consistent
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Price and variety in the Salop model Journal of Public Economic Theory (IF 1.336) Pub Date : 2023-11-20 Changying Li, Jianhu Zhang
Using a Salop circle model, this research analyzes the welfare implications of firm/product entry with information provision by consumers. While firms use consumer information to target sales efforts, consumers face privacy trade-offs when providing their personal information. We show that (i) price and profit first increase, then decrease with more varieties; (ii) consumer welfare, affected by price
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First-best health policy in vaccine markets with health and network externalities Journal of Public Economic Theory (IF 1.336) Pub Date : 2023-11-14 Rabah Amir, Filomena Garcia, Iryna Topolyan
This paper considers an oligopolistic market for a vaccine, characterized by negative network effects, which stem from the free-riding behavior of individuals engaged in a vaccination game. Vaccine markets often suffer from three imperfections: high concentration, network effects, and a health externality (contagion). The first conclusion of the paper is that the negative network externality is important
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Persuading sincere and strategic voters Journal of Public Economic Theory (IF 1.336) Pub Date : 2023-11-06 Toygar T. Kerman, P. Jean-Jacques Herings, Dominik Karos
A sender wants to persuade multiple homogeneous receivers to vote in favor of a proposal. Before the vote sender commits to a signal which sends private, potentially correlated, messages to receivers that are contingent on the true state of the world. The best equilibrium for sender in the resulting incomplete information game is unappealing: all receivers vote in favor of sender's preferred outcome
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Double auction for trading perfect complements Journal of Public Economic Theory (IF 1.336) Pub Date : 2023-10-30 Rakesh Chaturvedi, Ashish Kumar Pandey
For a trading problem where a buyer is interested in an aggregate resource with fragmented ownership, the individually owned resources are perfect complements in trade. A double auction, chosen in accordance with a value alignment principle which we formulate, is shown to be strategy proof for owners. Since it also values the aggregate resource correctly, it mitigates the holdout problem by changing
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FDI spillovers, new industry development, and economic growth Journal of Public Economic Theory (IF 1.336) Pub Date : 2023-10-18 Thanh Tam Nguyen-Huu, Ngoc-Sang Pham
The paper investigates the optimal strategy of a small open economy receiving foreign direct investment (FDI) in an optimal growth context. We prove that no domestic firm can enter the new industry when the multinational enterprise's productivity or the fixed entry cost is high. Nevertheless, the host country's investment stock converges to a higher steady state than an economy without FDI. A domestic
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Green industrial policy, information asymmetry, and repayable advance Journal of Public Economic Theory (IF 1.336) Pub Date : 2023-10-10 Guy Meunier, Jean-Pierre Ponssard
The energy transition requires the deployment of risky research and development programs, most of which are partially financed by public funding. Recent recovery plans, associated with the COVID-19 pandemic and the energy transition, increased the funding available to finance innovative low-carbon projects and called for an economic evaluation of their allocation. This paper analyzes the potential
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Optimal law enforcement when individuals are either moral or norm followers Journal of Public Economic Theory (IF 1.336) Pub Date : 2023-10-10 Claude Fluet, Tim Friehe
Moral rules and social norms influence whether individuals break the law. We characterize optimal law enforcement when some individuals obey internalized moral rules and implement social norms for other individuals who prefer to comply with them. Moral individuals and norm followers are linked via the endogenous social norm and this induces the social planner to create an expected sanction for norm
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Patent licensing for signaling the cost-reduction innovation: The case of the insider innovator Journal of Public Economic Theory (IF 1.336) Pub Date : 2023-10-08 Cheng-Tai Wu, Tsung-Sheng Tsai
We analyze the patent licensing contracts offered by an insider innovator that has private information about the quality of innovation that can be transferred to two downstream firms. When information is complete, the first-best choice is a pure-royalty contract which is accepted by both firms (i.e., is nonexclusive). When information is incomplete, however, no nonexclusive contract can be supported
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Should the police give priority to violence within criminal organizations? A personnel economics perspective Journal of Public Economic Theory (IF 1.336) Pub Date : 2023-09-18 C. Bravard, J. Durieu, J. Kamphorst, S. Roché, S. Sémirat
Even among themselves, criminals are not seen as trustworthy. Consequently, a criminal organization needs to incentivize its members, either by threats of violence or by rewarding good behavior. The cost of using violence depends on the resources police allocate to investigating intraorganizational violence. This means that the police may affect the choice of an incentive scheme by the criminal organization
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Nonrenewable resource use sustainability and public debt Journal of Public Economic Theory (IF 1.336) Pub Date : 2023-09-15 Nicolas Clootens, Francesco Magris
The sustainability of resource use and the management of public finances are both long-run issues that are linked to each other through savings decisions. To study them conjointly, this paper introduces a public debt stabilization constraint in an overlapping generation model in which nonrenewable resources constitute a necessary input in the production function and belong to agents. It shows that
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A generalized Hotelling–Downs model with asymmetric candidates Journal of Public Economic Theory (IF 1.336) Pub Date : 2023-09-15 Elham Nikram, Dieter Balkenborg
We investigate an extension of the Hotelling–Downs model to the case where the preferences of the voters do not have to be single peaked. In the case where candidates only care about winning or losing, assuming that a voter elects each candidate symmetrically with equal probability when indifferent, previous works by Fisher and Ryan and by Laffond, Laslier, and Le Breton have shown that the equilibrium
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Stable licensing schemes in technology transfer Journal of Public Economic Theory (IF 1.336) Pub Date : 2023-09-12 Shin Kishimoto
By considering combinations of a lump-sum fee and a per-unit royalty as licensing schemes in the transfer of new technology through licensing from a technology holder to oligopolistic firms, we investigate stable licensing schemes that are realized as bargaining outcomes. The licensing schemes agreeable to both the technology holder and licensees are necessarily rejection-proof; that is, no subgroup
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Monopolistic competition, rising markups, and optimal taxation of participation Journal of Public Economic Theory (IF 1.336) Pub Date : 2023-08-21 Eren Gürer
This study explores the optimal taxation of participation within a monopolistically competitive product market that exhibits increasing markups. Individual labor supply responds along both intensive and extensive margins. The government simultaneously optimizes a nonlinear Mirrleesian income tax scheme, a flat profit tax rate, and a flat unemployment benefit. It is shown analytically that the monetized
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Should credit card rewards be taxed? Journal of Public Economic Theory (IF 1.336) Pub Date : 2023-08-16 Oz Shy
Rewards that consumers receive on credit card payments influence their payment choice. They are not taxed but merchants deduct card fees from their taxes. This article analyzes the tax effects in a model where card companies set interchange fees, merchants decide whether to accept card payments, and consumers choose their preferred payment method. I find that card companies raise interchange fees when
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Cultural and economic integration of immigrant minorities: Analytical framework and policy implications Journal of Public Economic Theory (IF 1.336) Pub Date : 2023-08-15 Mark Gradstein, Moshe Justman
The cultural diversity that new immigrants bring to the host economy is potentially beneficial for the productivity of both immigrants and natives, but immigrants must assimilate to some extent for these benefits to be realized. In general, immigrants assimilate more slowly than natives would like, as they ignore the external material benefits of assimilation for natives and their resistance to foreign
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Asymmetric regulators in polluting mixed oligopolies: Agency problems and second-mover advantage Journal of Public Economic Theory (IF 1.336) Pub Date : 2023-08-08 John C. Strandholm, Ana Espinola-Arredondo, Felix Munoz-Garcia
We investigate privatization decisions in a mixed oligopoly market, with and without environmental regulation. We consider three agents: the manager of the public firm, the environmental agency, and the regulator choosing privatization levels; allowing them to assign different weights to pollution. When environmental policy is absent, we find that privatization decisions in equilibrium suffer from
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Comparative analyses of fiscal sustainability of the budgetary policy rules Journal of Public Economic Theory (IF 1.336) Pub Date : 2023-08-03 Koichi Futagami, Kunihiko Konishi
We construct a continuous-time overlapping generations model with an endogenous growth structure and consider fiscal sustainability under two fiscal rules: (i) the government fixes the budget deficit-to-GDP ratio and (ii) the government fixes the primary balance-to-GDP ratio. Under the constant budget deficit-to-GDP rule, fiscal sustainability is ensured when the initial public debt-to-GDP and budget
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Sovereign debt assistance and democratic decision-making Journal of Public Economic Theory (IF 1.336) Pub Date : 2023-06-29 Ruth Ben-Yashar, Miriam Krausz, Shmuel Nitzan
Organizational reforms stimulating democratic decision-making play a role in the economic effectiveness of concessional debt and debt relief. Effectiveness is defined as the increase in project approval produced by debt assistance. This claim is supported by a theoretic model illustrating the role of democratic decision-making in increasing lending as well as in determining the effectiveness of debt
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Equity-settled share-based payments and their (strategic) use under asymmetric information Journal of Public Economic Theory (IF 1.336) Pub Date : 2023-06-27 Stefano Bolatto, Giuseppe Pignataro
Share-based payments are of widespread use in today's economy. Consulting firms are increasingly accepting equity compensation for their services (particularly from startups) and many governments provide fiscal incentives to support this choice. Likewise, profit-sharing licensing is an on-trend business practice by innovative firms and patent holders when transferring their technology to interested
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Pricing energy consumption and residential energy-efficiency investment: An optimal tax approach Journal of Public Economic Theory (IF 1.336) Pub Date : 2023-06-06 Claude Crampes, Norbert Ladoux, Jean-Marie Lozachmeur
We analyze a Pareto optimal income tax problem à la Mirrlees in which households consume three types of goods: energy goods, energy-efficient investments, and nonenergy goods. The two main ingredients of our normative analysis are: (i) an indirect relationship between energy and the satisfaction of energy needs, as energy-efficient investments transform energy into services, such as light, heating
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Twin peaks: Expressive externality in group participation Journal of Public Economic Theory (IF 1.336) Pub Date : 2023-05-31 David K. Levine, Salvatore Modica, Junze Sun
We introduce a model of group behavior that combines expressive participation with strategic participation. Building on the idea that expressive voting in elections is much like rooting for a sports team, we give applications to both sporting events and elections. In our model there is an expressive externality: an individual enjoys an event more when more of her peers come out to support her preferred
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Taxes, risk taking, and financial stability Journal of Public Economic Theory (IF 1.336) Pub Date : 2023-05-22 Michael Kogler
After the global financial crisis, the use of taxes to enhance financial stability received new attention. This paper analyzes the corrective role of taxes in banking and compares two instruments, namely, an allowance for corporate equity (ACE), which mitigates the debt bias in corporate taxation, and a Pigovian tax on bank debt (bank levy). We emphasize financial stability gains driven by lower bank
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Effects of subsidies on growth and welfare in a quality-ladder model with elastic labor Journal of Public Economic Theory (IF 1.336) Pub Date : 2023-04-24 Ruiyang Hu, Yibai Yang, Zhijie Zheng
This paper develops a quality-ladder growth model with elastic labor supply and distortionary taxes to analyze the effects of different subsidy instruments: subsidies to the production of final goods, subsidies to the purchase of intermediate goods, and subsidies to research and development (R&D). Moreover, the model is calibrated to the US data to compare the growth and welfare implications of these
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Opacity in bargaining over public good provision Journal of Public Economic Theory (IF 1.336) Pub Date : 2023-04-19 Julian Lamprecht, Marcel Thum
We consider ultimatum bargaining over the provision of a public good. Offer-maker and responder can delegate their decisions to agents whose actual decision rules are opaque. We show that the responder will benefit from strategic opacity, even with bilateral delegation. The incomplete information created by strategic opacity choices does not lead to inefficient negotiation failure in equilibrium. Inefficiencies
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The role of vaccine effectiveness on individual vaccination decisions and welfare Journal of Public Economic Theory (IF 1.336) Pub Date : 2023-04-10 Andrea Sorensen
This paper examines a theoretical model designed to characterize a static, individual vaccination decision environment. I identify and characterize both equilibrium and socially optimal vaccination behavior and determine how this behavior changes as the effectiveness of the vaccine changes. I also evaluate the individual and social welfare implications of a change in vaccine effectiveness. I find that
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More competition to alleviate poverty? A general equilibrium model and an empirical study Journal of Public Economic Theory (IF 1.336) Pub Date : 2023-04-07 Hend Ghazzai, Wided Hemissi, Rim Lahmandi-Ayed, Sana Mami Kefi
In this paper, we theoretically and empirically analyze the impact of competition on poverty. We consider a general equilibrium framework with vertical preferences and compare poverty in a Monopoly setting versus a Duopoly setting considering explicitly the ownership structure. Poverty is measured by the size of the population living below an absolute poverty line. Theoretical results show that the
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A spatial theory of urban segregation Journal of Public Economic Theory (IF 1.336) Pub Date : 2023-04-02 Gian Luca Carniglia, Juan F. Escobar
We provide a competitive equilibrium theory of urban segregation in a linear city. Households demand consumption and housing along the city and are exposed to neighborhood externalities. We show that equilibria that are robust to small coalitional deviations are segregated. Our results explain urban segregation in a standard neoclassical framework and shed new light on the difficulties faced by authorities
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Control and spread of contagion in networks with global effects Journal of Public Economic Theory (IF 1.336) Pub Date : 2023-03-29 John Higgins, Tarun Sabarwal
We study proliferation of an action in binary action network coordination games that are generalized to include global effects. This captures important aspects of proliferation of a particular action or narrative in online social networks, providing a basis to understand their impact on societal outcomes. Our model naturally captures complementarities among starting sets, network resilience, and global
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Information design, externalities, and government interventions Journal of Public Economic Theory (IF 1.336) Pub Date : 2023-03-05 Cheng Li, Yancheng Xiao
We consider a model of Bayesian persuasion with spillovers. A sender provides information to persuade a receiver to take an action with external effects. We consider how government interventions, including corrective subsidy and tax, affect social welfare. In addition to internalizing externalities, government interventions affect social welfare through an informational channel. Subsidies to the sender's
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Timing of preference submissions under the Boston mechanism Journal of Public Economic Theory (IF 1.336) Pub Date : 2023-03-01 Li Chen
This paper considers a model of centralized college admission under the Boston mechanism where students may have uncertainty about their priorities. Students have homogeneous ordinal preferences over colleges, but their preference intensities vary, and the exam scores determine their priorities. In equilibrium, student application strategies take a cutoff form. The strategies depend on their exam scores
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Kantian equilibria of a class of Nash bargaining games Journal of Public Economic Theory (IF 1.336) Pub Date : 2023-03-01 Atakan Dizarlar, Emin Karagözoğlu
We study Kantian equilibria of an n $n$ -player bargaining game, which is a modified version of the well-known divide-the-dollar game. We first show that the Kantian equilibrium exists under fairly minimal assumptions. Second, if the bankruptcy rule used satisfies equal treatment of equals, and is almost nowhere proportional, then only equal division can prevail in any Kantian equilibrium. On the other
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Optimal climate and fiscal policy in an OLG economy Journal of Public Economic Theory (IF 1.336) Pub Date : 2023-02-03 Richard Jaimes
This paper develops a climate–economy model to study the joint design of optimal climate and fiscal policies in economies with overlapping generations (OLGs). I demonstrate how capital taxation, if optimal, drives a wedge between the market costs of carbon (the net present value of marginal damages using the market interest rate) and the Pigouvian tax (the net present value of marginal damages using
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Minimum wage spillover effects and social welfare in a model of stochastic job matching Journal of Public Economic Theory (IF 1.336) Pub Date : 2023-02-02 Panagiotis Nanos
In this paper, I carry out a welfare analysis of the minimum wage in the framework of a Diamond–Mortensen–Pissarides model with stochastic job matching. I explore the role of the minimum wage in a labor market with trading externalities and present the necessary and sufficient condition for a minimum wage hike to be efficiency enhancing. In this context, I characterize minimum wage spillover effects
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Growth and optimal policies in an R&D-growth model with imperfect international capital mobility Journal of Public Economic Theory (IF 1.336) Pub Date : 2022-12-22 Mei-ying Hu, Ping-ho Chen, Hsun Chu, Ching-chong Lai
In this paper, we examine the effects of international capital mobility on innovation, growth, and optimal growth policies in a small open economy with R&D-driven growth. Households can borrow funds from an imperfect international capital market to finance their investment in R&D firms. We show that the economy can reach a higher growth rate if international capital is more mobile. This result is consistent
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Optimal patent licensing—Two or three-part tariff Journal of Public Economic Theory (IF 1.336) Pub Date : 2022-12-13 Swapnendu Banerjee, Arijit Mukherjee, Sougata Poddar
We look into technology transfer by an insider patentee in a spatial duopoly model under three types of licensing contracts—(i) two-part tariff with fixed fee and per-unit royalty, (ii) two-part tariff with fixed fee and ad-valorem royalty and (iii) general three-part tariff with fixed fee, per-unit and ad-valorem royalties. Under two-part tariff contracts, the licenser is better off with the per-unit
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Endogenous timing in tax competition: The effect of asymmetric information Journal of Public Economic Theory (IF 1.336) Pub Date : 2022-12-02 Takaaki Hamada
This study explores the effects of asymmetric information on endogenous leadership in a simple tax competition environment. The study models a two-country economy where one country is informed about its own and opponent's productivity of private goods, while the other country only knows its productivity. The results show that each type of informed country has an incentive to pretend to be the other
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Nonlinear taxation of income and education in the presence of income-misreporting Journal of Public Economic Theory (IF 1.336) Pub Date : 2022-12-02 Spencer Bastani, Firouz Gahvari, Luca Micheletto
We study the joint design of nonlinear income and education taxes when the government pursues redistributive objectives. A key feature of our setup is that the ability type of an agent can affect both the costs and benefits of acquiring education. Market remuneration of agents depends on both their innate ability type and their educational choices. Our focus is on the properties of constrained efficient
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Scale-dependent and risky returns to savings: Consequences for optimal capital taxation Journal of Public Economic Theory (IF 1.336) Pub Date : 2022-11-18 Eddy Zanoutene
I present a model of optimal capital taxation where agents with heterogeneous labor productivity randomly draw their rate of return to savings. Because of scale dependence, the distribution of rates of returns can depend on the amount saved. Uncertainty in returns to savings yields an insurance rationale for taxing capital on top of labor income. I first show that, because of scale dependence, agents
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Tax competition, public input, and market power Journal of Public Economic Theory (IF 1.336) Pub Date : 2022-11-15 Steve Billon
An increase in the number of local jurisdictions providing industrial public goods may lead to a rise in the equilibrium tax rate, in contrast to the case of residential public goods. When local jurisdictions are Leviathans, an increase in competition may expand tax revenues and thus fail to tame the Leviathan, contrary to the conventional wisdom.
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Social welfare and the unrepresentative representative consumer Journal of Public Economic Theory (IF 1.336) Pub Date : 2022-11-10 Michael Jerison
If, for all prices, income distribution is optimal for a planner with a social welfare function, then aggregate demand is the same as that of a single “representative consumer” whose preferences over aggregate consumption are the same as the planner's. This paper shows that the converse is false. Aggregate demand may be the demand function of a representative consumer although the income distribution
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Can corruption encourage clean technology transfer? Journal of Public Economic Theory (IF 1.336) Pub Date : 2022-11-07 Chiu Yu Ko, Bo Shen, Xuyao Zhang
We study the impact of environmental regulation on the transfer of a clean technology where bureaucrats are needed for government intervention. In the absence of corruption, when environmental taxes are low, a technology transfer always takes place and it increases total outputs, but may lead to higher pollution levels. However, when corruption is possible, a firm with a dirty technology may choose
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Political alienation and voter mobilization in elections Journal of Public Economic Theory (IF 1.336) Pub Date : 2022-11-06 Alberto Grillo
The paper examines candidates' choice between policies that increase the number of supporters and policies that foster their participation. Voter turnout is decided at the group level, in response to candidates' policies. A convex utility function captures the alienation of citizens who are far from all candidates. In equilibrium, extreme policies are adopted as a mobilization strategy, if citizens
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The purity of impure public goods Journal of Public Economic Theory (IF 1.336) Pub Date : 2022-10-19 Anja Brumme, Wolfgang Buchholz, Dirk Rübbelke
In this paper, we provide a new perspective on the links between the analysis of the voluntary provision of pure and impure public goods. In particular, it is shown that the impure public good model can be transformed into a pure public good one. This innovative method not only leads to new comparative statics results, but also provides new insights on the impure public good model, for example, on
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Endogenous leadership and sustainability of enhanced cooperation in a repeated interactions model of tax competition: Endogenous leadership in tax competition Journal of Public Economic Theory (IF 1.336) Pub Date : 2022-10-12 Jun-ichi Itaya, Chikara Yamaguchi
In this study, the endogenous timing of moves is analyzed in an infinitely repeated game setting of capital tax competition between a subgroup (a tax union) of countries agreeing on partial tax harmonization and outside countries. It is shown that in a subgame perfect equilibrium of the infinitely repeated tax competition game, they simultaneously set capital taxes in every stage game when a tax union
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Informational roles of pre-election polls Journal of Public Economic Theory (IF 1.336) Pub Date : 2022-10-12 Jinhee Jo
This paper introduces a pre-election polling stage to Feddersen and Pesendorfer's two-candidate election model in which some voters are uncertain about the state of the world. While Feddersen and Pesendorfer find that less informed, indifferent voters strictly prefer abstention, which they refer to as the swing voter's curse, I show that there exists an equilibrium in which everyone truthfully reveals
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Optimal taxation with positional considerations Journal of Public Economic Theory (IF 1.336) Pub Date : 2022-10-10 Ourania Karakosta, Eleftherios Zacharias
This paper analyzes the optimal commodity tax policy, in a generalized vertical differentiation model in which consumers have positional considerations. Consumers enjoy having a product which is better than that owned by others, and feel envy when others own a better product than them. We examine the impact of these positional considerations on the optimal tax and welfare when a monopoly produces two
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Theory of cultural capital: Productive use of an unproductive activity Journal of Public Economic Theory (IF 1.336) Pub Date : 2022-10-06 Sam-Ho Lee
Cultural capital is the term suggested to explain the phenomena that seemingly productivity-irrelevant cultural activities may lead to better economic outcome for individuals. A simple model is proposed to explain the emergence of cultural capital. The cost of acquiring a cultural attribute plays a role in the emergence of cultural capital. The importance of cultural capital is compared between two
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Pension, possible phaseout, and endogenous fertility in general equilibrium Journal of Public Economic Theory (IF 1.336) Pub Date : 2022-09-30 Amol Amol, Monisankar Bishnu, Tridip Ray
The rich literature on Pay-As-You-Go (PAYG)-type pensions provides a notion that when pension return is dominated by the market return, generally it is impossible to phase pension out without hurting any generation. We show that PAYG pensions can indeed be phased out in a much richer framework where fertility is endogenous and general equilibrium effects are present. Interestingly, the factor that