Journal of Public Economic Theory最新文献

This paper studies winner-takes-all Tullock contests between two groups, each formed by a principal and a delegate. Principals allocate the monetary prize within their group, while delegates exert effort to win it. In equilibrium, the more productive delegate receives a smaller prize share while enjoying a higher expected payoff. Nevertheless, delegates' expected payoffs do not monotonically increase with their productivity. As productivity differences get wide enough, delegates' expected payoffs decline and tend to zero. Finally, a more balanced competition raises both delegates' efforts and prize shares, ultimately benefiting delegates' utilitarian welfare.

We consider a polluting duopoly that sells differentiated goods and is subject to environmental regulation, by means of an emission or a performance standard. The firms simultaneously choose prices and investment in R&D—to improve their abatement technology—and we show that the performance standard leads to lower prices and per-firm profits, but higher R&D, consumer surplus and social welfare when the goods are substitutes. If the goods are complements, such rankings may be reversed, except for the welfare comparison. We also provide a full comparative statics analysis of the equilibria under both instruments with respect to the stringency of the regulation and the degree of product differentiation. Finally, we show that the entry of firms reduces social welfare and eventually reverses its comparison.

This paper explores the interplay between transfer policies, R&D, corruption, and economic development using a general equilibrium model with heterogeneous agents and a government. The government collects taxes, redistributes fiscal revenues, and undertakes public investment (in R&D, infrastructure, etc.). Corruption is modeled as a fraction of tax revenues that is siphoned off and removed from the economy. We first establish the existence of a political-economic equilibrium. Then, using an analytically tractable framework with two private agents, we examine the effects of corruption and evaluate the impact of various policies, including redistribution and innovation-led strategies.

Many natural and artificial marine habitats provide refuge for prey species by reducing predation pressure. While such refuges are primarily intended to support biodiversity, their economic implications remain insufficiently understood. This paper develops a tractable two-species predator–prey model with specialized, strategic harvesting to assess how prey refuges shape the efficiency and sustainability of multispecies fisheries. Prey refuges lower effective fishing pressure on both species. Beyond increasing gains in the prey fishery by mitigating natural predation, they may also generate spillover gains for the predator industry through greater prey availability outside the refuge. The analysis characterizes conditions under which a welfare-maximizing regulator would implement an artificial refuge to manage predation intensity. Since a refuge provides benefits only through population dynamics, the discount rate is an important determinant of the model. Even when human predation is controlled through optimal harvesting quotas, artificial refuges remain an effective instrument for managing natural predation. Finally, I use data from predator–prey interactions in Lake Victoria fisheries to support the theoretical findings.

We study a model in which individuals, who are heterogeneous along a single dimension capturing productivity, choose which of two available groups to join and how much costly effort to exert within their chosen group. On the one hand, individuals like to be in groups where others' average performance is high (global quality). On the other hand, individuals are concerned with their ranking with respect to their peers' average performance (local standing). Nash equilibrium efforts are such that the higher the individual's productivity the higher her private outcome. In contrast, it is not necessarily the case that highly productive individuals exert more effort. When social welfare is measured as the sum of individual utilities, Nash equilibrium efforts are never efficient and whether they are higher or lower than efficient efforts depends on the strength of global quality versus local standing concerns. Moreover, stable partitions of society into groups may either resemble grouping by productivity or productivity mixing. In contrast, efficient partitions must always exhibit grouping by productivity.

In accordance with strong empirical evidence that casts doubt on the conventional Cobb-Douglas technological specification, this paper examines the long-run macroeconomic effects of progressive income taxation in a one-sector endogenous growth model with heterogeneous households and a non-unitary elasticity of substitution between productive capital and labor inputs. In a simplified two-type version of the baseline macroeconomy, we analytically show that higher fiscal progression leads to less unequal long-run gross/net income distributions, provided the general-equilibrium elasticity of aggregate labor supply surpasses a specific negative threshold. This inequality-growth relationship is found to hold for all variants of our model under consideration. Numerical simulations find that under either productivity-enhancing or utility-generating public expenditures, together with the elasticity of substitution in intertemporal-consumption/production taking on the highest/lowest possible value regarded as empirically plausible, our fully-calibrated model to OECD data with five types/quintiles is able to generate qualitatively as well as quantitatively realistic long-run disposable-income inequality effects of changing the tax progressivity vis-à-vis recent panel estimation results. We also numerically study how more progressive taxation affects the economy's long-run social welfare and output growth rate with useless or useful government spending.

Understanding the supply and recycling of critical minerals is crucial for advancing clean technologies and mitigating resource depletion. The strategic decisions of exporting and importing countries regarding critical minerals are modeled as a differential game. The Markovian subgame perfect Nash equilibrium of this game is characterized by a system of nonlinear partial differential Hamilton-Jacobi-Bellman (HJB) equations. Mathematical and numerical analysis reveal existence of multiple subgame perfect Nash equilibria. The main finding of this analysis is that the market can rely on virgin resources, recyclable reserves (provided recycling technology is available), or a combination of both. However, it is also possible that a monopoly may halt supply before exhausting its reserves if exploitation costs are prohibitively high and/or if the recyclable resources are near depletion. This situation accelerates the monopoly's return to a monopoly position.

This paper presents a model on the political economy of trade and environmental policies in the presence of asymmetric information. Information asymmetries stem from the preference of the incumbent government towards welfare of the general voter and political contributions made by special interest groups. Special interest groups are owners of sector-specific factors of production used to produce traded final goods and there exist negative production externalities. The incumbent uses trade and environmental policies to regulate trade flows and environmental quality, respectively. Results show that: (i) information asymmetries work in favour of special interest groups as they guarantee laxer environmental policy in comparison to the baseline scenario of complete information; (ii) trade policy in the domestic country is invariant of the information on the incumbent's preference over aggregate social welfare and reflect terms-of-trade effects and addresses production externalities generated abroad; (iii) including intermediate goods along with final goods in the model creates an additional layer of distortion in the environmental policy through cross-sectoral effects on returns to the sector-specific factors of production. The downward distortion in environmental policy worsens environmental quality, which adversely affects the general voters.