Optimal public policy and endogenous preferences: an application to an economy with for-profit and non-profit enterprises
AbstractWe present a general equilibrium model where profit-maximizing firms and non-profit organizations coexist, and the people’s propensity to devote efforts to non-profit activities increases with the stock of social capital. In its turn, the formation of social capital is stimulated by an increase in the aggregate volume of non-profit activities. Therefore, a public policy subsidizing the nonprofits has an indirect effect on people’s preferences concerning the effort to devote to these organizations via its positive impact on the accumulation of social capital. Within this framework, we analyze the optimal policies of a government facing myopic or rational agents.
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Bibliographic InfoPaper provided by Department of Economics, University of Trento, Italia in its series Department of Economics Working Papers with number 0713.
Date of creation: 2007
Date of revision:
Myopic behavior; Work effort; Social capital; Altruism; Third sector.;
Find related papers by JEL classification:
- D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
- D60 - Microeconomics - - Welfare Economics - - - General
- H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
- J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
- L31 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Nonprofit Institutions; NGOs
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-06-18 (All new papers)
- NEP-PBE-2007-06-18 (Public Economics)
- NEP-SOC-2007-06-18 (Social Norms & Social Capital)
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