This paper extends Selten’s (Int J Game Theory 4:25–55,
1975
) notion of perfection to normal-form games of incomplete information and provides conditions on the primitives of a game that ensure the ...existence of a perfect Bayes–Nash equilibrium. The existence results, which allow for arbitrary (compact, metric) type and/or action spaces and payoff discontinuities, are illustrated in the context of all-pay auctions and Cournot games with incomplete information and cost discontinuities.
The notion of
communication equilibrium
extends Aumann’s (J Math Econ 1:67–96, 1974,
https://doi.org/10.1016/0304-4068(74)90037-8
) correlated equilibrium concept for complete information games to ...the case of incomplete information. This paper shows that this solution concept has the following property: for the class of incomplete information games with compact metric type and action spaces, and with payoff functions jointly measurable and continuous in actions, limits of Bayes-Nash equilibria of finite approximations to an infinite game are communication equilibria (and, in general,
not
Bayes-Nash equilibria) of the limit game. Stinchcombe’s (J Econ Theory 146:638–655, 2011b,
https://doi.org/10.1016/j.jet.2010.12.006
) extension of Aumann’s (J Math Econ 1:67–96, 1974,
https://doi.org/10.1016/0304-4068(74)90037-8
) solution concept to the case of incomplete information fails to satisfy this condition.
An alternative to natural monopoly Carbonell-Nicolau, Oriol
Journal of regulatory economics,
12/2020, Letnik:
58, Številka:
2-3
Journal Article
Recenzirano
Odprti dostop
We consider a shared ownership arrangement among consumers/owners as a means to organize production with an underlying decreasing average cost function typical of natural monopolies. The resulting ...output allocation yields a lower deadweight loss than the monopoly allocation, and is, in some cases, efficient.
A commodity tax system is inequality reducing if the after‐tax distribution of income Lorenz dominates the before‐tax distribution of income, regardless of initial conditions. This paper identifies ...necessary and sufficient conditions under which an ad valorem commodity tax system is inequality reducing, shedding light on the role of taxing luxury—as opposed to necessary—commodities in the equalization of after‐tax incomes.
The link between income inequality and progressive taxation has long been considered a fundamental normative foundation for income tax progressivity. This paper furnishes necessary and sufficient ...conditions on primitives, in terms of the elasticity of income with respect to ability, under which various subclasses of progressive taxes are inequality reducing. The distributional effects of progressive income taxation are decomposed into two conditions on the wage elasticity of income, the
tax rate effect
and the
subsidy effect
, each capturing different aspects of the transition between before-tax and after-tax income distributions. The results confer a degree of useful flexibility to the theory, in that they allow the analyst to expand the universe of consumer preferences by suitably restricting the set of marginal-rate progressive taxes. As an illustration of the results’ practical implications, we provide a precise characterization of the subclass of (progressive) taxes that are inequality reducing for the constant elasticity of substitution (CES) and the quasi-linear utility functions.
The case for progressive income taxation is often based on the classic result of Jakobsson, 1976 and Fellman, 1976, according to which progressive and only progressive income taxes - in the sense of ...increasing average tax rates on income - ensure a reduction in income inequality. This result has been criticized on the grounds that it ignores the possible disincentive effect of taxation on work effort, and the resolution of this critique has been a longstanding problem in public finance. This paper provides a normative rationale for progressivity that takes into account the effect of an income tax on labor supply. It shows that a tax schedule is inequality reducing only if it is progressive - in the sense of increasing marginal tax rates on income - and identifies a necessary and sufficient condition on primitives under which progressive and only progressive taxes are inequality reducing.
We prove the existence of a pure-strategy trembling-hand perfect equilibrium in upper semicontinuous potential games, and we show that generic potential games possess pure-strategy strictly perfect ...and essential equilibria. We also establish a more powerful result: the set of maximizers of an upper semicontinuous potential contains a strategically stable set of pure-strategy Nash equilibria.
This paper shows that, in the presence of negative production external effects (e.g., waste, pollution), market-driven technology adoption is socially inefficient. Two distinct market structures are ...considered within the neoclassical framework: perfect competition and monopoly. In both cases, there is a range of cost structures under which firms prefer the adoption of inferior technologies. A number of policy instruments are considered in terms of their welfare enhancing properties.
The steady rise in income and wealth inequality in the last four decades, together with the evolution of a vanishing middle class, has raised concerns about potentially pernicious effects of these ...trends on social stability and economic growth. This paper evaluates the possibility of designing tax systems aimed at reducing income inequality and bipolarization. Using two fundamentally different metrics, we provide a unified foundation of tax progressivity whereby, roughly, taxes are progressive if and only if they are inequality reducing; and taxes are inequality reducing if and only if they are bipolarization reducing.
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