Journal of Public Economic Theory最新文献

Matching is a commonly used fund-raising tactic, whereby small donors have their donation to a charity matched via a fund established by large donors. I developed a model in which a single large donor decides whether to establish a matching fund or contribute to the public good via the voluntary contributions mechanism (VCM). The credibility of the matching fund is an endogenous component of the model. For a match to be credible, the organizer must have a credible promise not to top up the contributions of the small donors. If the number of small donors is sufficiently large, there always exists a matching fund that is both credible and leads to a Pareto improvement relative to the VCM. When the matching fund needs to satisfy an endogenous credibility constraint, all of the outcomes that are eliminated due to this constraint are outcomes under which small donors are worse off relative to the VCM. The matching fund is also compared with a raffle mechanism. As the number of small donors grows large, public good provision under the two mechanisms converges. However, the matching function outperforms the raffle when there is a finite number of small donors.

An assignment is rank efficient if there is no other assignment where the expected number of agents who received one of their top choices is weakly higher. We introduce new notions of rank efficiency for the random assignment problem and illustrate a hierarchy between them. In a rank-minimizing assignment, agents receive objects with a minimum rank on average. An ex-post rank efficient random assignment has at least one lottery over only rank efficient deterministic assignments. Thus, it could still have another lottery with some rank-dominated deterministic assignments in its support. If each deterministic assignment in any decomposition of a random assignment is rank efficient, we call it a robust ex-post rank efficient assignment. We demonstrate that rank-minimizing implies rank efficiency, which indicates (robust) ex-post rank efficiency. Moreover, we introduce a mechanism that provides an ex-post rank efficient random assignment. We also prove that ex-post rank efficiency is incompatible with strategyproofness or fairness in the sense of weak envy-freeness and equal division lower bound.

Salient features of major economies around the world, specifically in high-income countries, are graying population and declining fertility. Incorporating the quantity–quality tradeoff of children into an overlapping generations model, this paper presents an analysis of the effects of formal old-age support on fertility and economic growth. Because of health risks during old age, which might be too severe to be covered privately, some economically developed countries have public old-age support programs. Formal old-age support provision is regarded as involving management costs, for instance, caused by X-inefficiency in addition to labor costs. Findings demonstrate that when management costs are sufficiently small, formal old-age support raises the balanced economic growth rate, involving a smaller tax burden and freeing individual time from family old-age support, but it lowers fertility. Effects on the lifetime utility of individuals are indeterminate. By contrast, when management costs are high, the increased formal old-age support deters economic growth through a negative income effect. However, it also lowers the fertility rate. In this case, lifetime utility becomes lower. Our major finding is that, when the cost inefficiency of public support is not high, formal old-age support might increase long-term lifetime welfare of individuals, but it lowers fertility.

Militias hamper state-building by undermining the government's monopoly of violence, which creates an environment of anarchy. Yet many governments collaborate with them. These pro-government militias (PGMs), such as paramilitary groups, are not only a poor-country phenomenon, that is, economic growth does not seem to eradicate these armed nonstate actors: Intriguingly, cross-country data reveals a U-shaped relationship between GDP per capita and PGM presence. This article presents an economic theory of PGM supply that can explain this puzzling relationship and provide actionable ways for international actors (e.g., UN) to discourage the emergence of PGMs. However, the theory also cautions that some common international policies (e.g., development aid) may unintentionally encourage PGM supply.

Citizens may derive personal benefits from new technologies while remaining uncertain about their potential social harm. Consequently, citizens may delegate the decision of legal prohibition to politicians, but conflicts can arise because politicians may have self-interested motivations. How does the interaction of uncertainty regarding social harm and politicians' incentives affect the legal prohibition of new technologies? To answer this question, we develop a two-period political agency model combined with a law enforcement model in which citizens endogenously determine whether to become law-breaking or law-abiding citizens. We then demonstrate that (i) when uncertainty regarding social harm is low, politicians tend to opt for under-enforcement, while (ii) when uncertainty is high, politicians are inclined toward over-enforcement. Additionally, we show that as politicians have greater motivation to hold office, expected welfare is enhanced when future uncertainty about harm exceeds current uncertainty although this may result in distorted law enforcement.