Journal of Public Economic Theory最新文献

This paper analyzes the coalition structure core when coalitions have a finite number of players in atomless NTU games. Kaneko and Wooders showed that when there are finite types of players the above notion of the core (the f-core) is nonempty. In this paper, we provide a direct proof of the above result using Kakutani's fixed-point theorem when the sizes of coalitions are not only finite but also bounded above. This condition simplifies the presentation of the model and the existence proof. Unlike previous work, we dispense with the comprehensiveness assumption in NTU games, thereby broadening the applicability of our result to include matching problems and hedonic coalition formation models. Furthermore, we show that, in the absence of comprehensiveness, f-core allocations may fail to exhibit equal treatment in payoffs for the same type of players. We also note that Scarf's nonemptiness result for the core of NTU games follows as a corollary of our main theorem.

This paper examines the optimal dynamic taxation of capital in the context of skill-biased technological change. The study reveals that the widening wage gap, coupled with the complementarity between consumption and leisure, provides a novel rationale for capital taxation. We demonstrate that taxing capital is beneficial in economies experiencing persistent skill-biased technological advancements, even if the capital is skill-neutral and the complementarity between consumption and leisure is time invariant. Converse results appear when leisure substitutes for consumption. Statistics-based optimal tax formulas are provided to show how the government can dynamically mitigate the impacts of various technological changes through the utilization of labor and capital income taxes.

This paper studies the optimal bailout coverage of a media firm. Driven by the incentive to lower its expected borrowing costs, the media firm's coverage tends to favor the banking sector. However, this pro-bank bias results in the same ex ante expected borrowing cost as truthful coverage. While bias reduces borrowing costs when a bailout provides no public benefit, it also leads to higher borrowing costs when a bailout serves the public interest. Ultimately, pro-bank media bias always harms the taxpayer's expected welfare. Moreover, greater financial fragility in the media sector increases the likelihood of bank failures that taxpayers would ideally seek to prevent.

This paper studies strategic effort disclosure in dynamic team contests. Two teams of two players compete in a Tullock contest with teammates' sequential efforts aggregated across two periods using a Cobb–Douglas production function. We examine how equilibrium efforts and winning probabilities are affected by the teams' communication policies: no communication, private communication (efforts shared internally with stage-2 teammates), and public communication (efforts disclosed to stage-2 rivals as well). To describe asymmetric information generated by privately observable efforts for each communication policy profile, we use a perfect Bayesian equilibrium with an appropriate belief refinement for multistage complete information games. In the unique positive-effort equilibrium, the optimal choice of a communication strategy differs for the favorite (the strong team) and the underdog (the weak team). Private communication only benefits the underdog team, fostering effort complementarity and improving their chances of winning and payoffs. In contrast, the favorite team prefers either public or no communication to deter rival efforts or avoid intrateam free-riding. Importantly, endogenous communication policies reshape competitive dynamics, with private disclosure of efforts serving as a strategic equalizer for weaker teams.

We explore the interaction between enforcement and individual-specific sensitivity to moral standards in determining the scope of extortion and collusion in a bureaucracy consisting of corruptible officers. The moral standard is determined by the number of corrupt officers in the bureaucracy, which is a function of both the penalty and the probability of conviction of collusion. Both a higher penalty and a more active independent auditor, like the media, keep the number of corrupt officers in check in a “low” and “medium” penalty situation and incentivize compliance. Extortion occurs only under a “low penalty, low compliance cost” situation. Increases in penalty or judicial accuracy in judging extortion cases or active independent auditing keep extortion in check. Controlling the rent of the firms induces compliance and reduces both extortion and collusion incidents in an economy, having a greater impact on collusion than extortion.

The capabilities of illicit trafficking organizations to expand or contract their periphery and source segments by modifying their link structures pose challenges to law enforcement. This paper scrutinizes the structural response of illicit trafficking organizations to intervention strategies. It also studies how the law enforcement authority should allocate its resources between the source and the periphery segments, given the structural response of trafficking, to minimize the expected harms. The analysis shows that traffickers integrate the supply, possibly build redundant sources and expand in peripheral markets if the source segment is targeted (decapitation), maintain near-maximal expansion by splintering into supply cells or thin subnetworks if the periphery is targeted (amputation). This response subverts law enforcement primarily by suppressing the possibility of trace-back detection of trafficking units through their detected connections. In the transnational trafficking context, it can also stifle intelligence sharing between nations. The optimal intervention, then, is amputation under intermediate budgets and large source fragmentation costs, decapitation under low detection contiguity. Actual policies that prioritize border protection and port-of-entry units can be optimal from national, but not global, perspective.