Journal of Public Economic Theory最新文献

How does the level of democracy in a country affect the government's treatment of ethnic minorities? I use the Baron–Ferejohn game to model bargaining over government formation and resource division in an ethnically fragmented society. Each ethnic group is a unitary actor, voting weights correspond to ethnic group sizes, and recognition probabilities are proportional to voting weights. The voting quota required to pass a decision is a proxy for the level of democracy. When the majority group exceeds half of the population, the expected payoffs of minorities non-monotonically depend on the voting quota. When the voting quota is small, several minorities may form a winning coalition, so minorities get high expected payoffs. This outcome explains the existence of relatively tolerant autocracies. For intermediate values, a coalition of minorities is insufficient to rule while the majority is sufficient. As a result, it gets most of the surplus, which reflects democracies where minorities are underrepresented in the government and get fewer benefits. Finally, when the voting quota is large, minorities are needed to form a winning coalition, so their expected payoffs are high, too. The latter scenario corresponds to democracies with many constraints on the leader, who needs the support of minorities to get approval from various branches of power.

This paper presents a signaling model of eco-labeling that incorporates social benefits from green consumption through bandwagon effects. A monopoly firm chooses whether to adopt an eco-label when consumers are uncertain about the firm's environmental type but derive utility from both the intrinsic value of green products and their social desirability. The analysis reveals that the strength of bandwagon effects relative to intrinsic value determines equilibrium outcomes: weak effects support only separating equilibria where green firms truthfully label, while strong effects enable both separating and pooling equilibria, creating opportunities for greenwashing. Paradoxically, higher consumer trust in firm greenness expands opportunities for greenwashing by making pooling equilibria profitable over a wider range of labeling costs. However, pooling equilibria require identical labeling costs for both firm types—even small cost differentials favoring green firms will eliminate greenwashing, providing an empirically testable prediction with implications for certification design. Welfare analysis demonstrates that separating equilibria generates strictly higher consumer surplus and producer surplus simultaneously compared to pooling equilibria, while also mitigating the environmental damage from brown production that occurs under pooling. The model identifies a critical labeling cost threshold above which policies that increase green product value lead to market expansion rather than premium positioning, suggesting that subsidies for green product improvement should be coupled with measures which push labeling costs above this threshold. The model reveals a tension in regulatory approach: markets with strong social effects and high consumer trust require the most stringent certification and monitoring to prevent greenwashing, while those dominated by intrinsic value may function effectively with simpler schemes. The results provide theoretical justification for risk-based enforcement strategies that intensify monitoring as consumer trust increases and suggest that third-party certification or targeted subsidies creating cost differentials between firm types can effectively deter greenwashing.

This paper considers a green managerial delegation contract where the managers face a relative profit performance competition and examines the impact of emission taxes on a firm's environmental and social performances. When the owners can determine profit-oriented environmental corporate social responsibility (ECSR), we compare committed tax and time-consistent tax cases and show that owners adopt ECSR only if the competition managers face is severe enough in both cases. The resulting industry profits are non-monotone in the severity of competition only when firms adopt ECSR under a time-consistent tax. Our findings suggest that the government should increase its credibility in the tax commitment when competition is intense, while it should coordinate with regulated firms regarding their optimal regulatory timing when competition is less severe and product substitutability is high.

We introduce the horizon-$��\; ��k��$ vNM stable set to study one-to-one priority-based matching problems with limited farsightedness. We show that, once agents are sufficiently farsighted, the matching obtained from the Top Trading Cycles (TTC) algorithm becomes stable: a singleton set consisting of the TTC matching is a horizon-$��\; ��k��$ vNM stable set if the degree of farsightedness is greater than three times the number of agents in the largest cycle of the TTC. Our main results do not hold per se for many-to-one priority-based matching problems: more coordination and cooperation on behalf of the agents are required. In the presence of couples, farsightedness may improve both efficiency and stability. When each agent owns an object, a singleton set consisting of the TTC matching is the unique horizon-$��\; ��k��$ vNM stable set.

This paper examines donations to social causes, generating public good-like externalities. Inspired by Bergstrom et al. (1986) and Andreoni (1989, 1990), our approach incorporates pure and impure altruism. We define an equilibrium notion, show an existence result, and its indeterminacy, which is real and comes from the decentralization of contributions by multiple private commodity bundles and how the aggregate and individual gifts enter the utility functions. In addition, we establish that the degree of indeterminacy of equilibrium prices increases with the number of private commodities. By adapting Andreoni's altruism index to our setting, we show that impure altruism can coexist with neutrality, highlighting the role of wealth in shaping perceptions of altruistic behavior.

In this theoretical article, I develop a unified framework that encapsulates: (i) a system of heterogeneous cities, (ii) unspecified transportation costs, and (iii) different land ownership structures that generate different fiscal externalities. I classify these land ownership structures into two categories: egalitarian versus inegalitarian. I then provide a full characterization of the decentralized and centralized economies. In particular, I prove that a spatial equilibrium can be a potential game equilibrium and can be a Cournot–Nash equilibrium. I also derive new conditions for existence, uniqueness, stability, optimality, and numerical approximation (Uzawa algorithm). This permits to disentangle the role of land ownership structures and fiscal externalities in the formation of cities. This also permits to demonstrate that land ownership structure is detrimental in determining the characteristics of a spatial equilibrium. In an egalitarian society, a spatial equilibrium sustains the social allocation. In an inegalitarian society, a spatial equilibrium is always suboptimal. Notably, I find a large spatial misallocation and substantial welfare costs by simulating the new framework using a version of the Uzawa algorithm and with a standard calibration. More globally, this establishes a new prediction that across-city inequalities have a link with global inefficiency.