Public Goods and Optimal Paternalism under Present-Biased Preferences
AbstractThis paper deals with the optimal provision of a state-variable public good in a two-type model, when the consumers have present-biased preferences due to quasi-hyperbolic discounting. The results show that the preference for immediate gratification facing the (mimicking) high-ability type weakens the incentive to adjust the public provision in response to the self-selection constraint.
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Bibliographic InfoPaper provided by HUI Research in its series HUI Working Papers with number 38.
Length: 7 pages
Date of creation: 01 Jun 2010
Date of revision:
Note: Public Goods; Quasi-Hyperbolic Discounting; Redistribution; Asymmetric Information
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Public Goods; Quasi-Hyperbolic Discounting; Redistribution; Asymmetric Information;
Find related papers by JEL classification:
- D03 - Microeconomics - - General - - - Behavioral Economics; Underlying Principles
- D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
- H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
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