Book/Printed Material Schedule selection by agents from price plans to tax tables
About this Item
Title
- Schedule selection by agents from price plans to tax tables
Summary
- "Requiring agents with private information to select from a menu of incentive schedules can yield efficiency gains. It will do so if, and only if, agents will receive further private information after selecting the incentive schedule but before taking the action that determines where on the incentive schedule they end up. We argue that this information structure is relevant in many applications. We develop the theory underlying optimal menus of non-linear schedules and prove that there exists a menu of schedules that offers a strict first-order interim Pareto improvement over the optimal single non-linear schedule. We quantify the gains from schedule selection in two settings. The first is a stylized example of a monopolistic utility company increasing profits by offering a menu of price plans. The second is a simulation based on U.S. earnings data, which shows that moving to a tax system that allows individuals to choose their tax schedule increases social welfare by the same amount as would occur from a 4.0 percent windfall gain in the government budget (or about $600 per filer per year). The resulting reduction in distortions accounts for about two thirds of the increase in social welfare while the remainder comes from an increase in redistribution"--National Bureau of Economic Research web site.
Names
- Luttmer, Erzo F. P.
- Zeckhauser, Richard
- National Bureau of Economic Research
Created / Published
- Cambridge, MA : National Bureau of Economic Research, c2008.
Notes
- - Title from PDF file as viewed on 6/13/2008.
- - Includes bibliographical references.
- - Also available in print.
- - Mode of access: World Wide Web.
- - System requirements: Adobe Acrobat Reader.
Call Number/Physical Location
- HB1
Digital Id
- https://hdl.loc.gov/loc.gdc/gdcebookspublic.2008610599
- http://papers.nber.org/papers/w13808 External
Library of Congress Control Number
- 2008610599
Access Advisory
- Unrestricted online access
Online Format
- image