Efficiency in the cake-eating problem with quasi-geometric discounting
This paper shows that any equilibrium allocation in the cake-eating problem with quasi-geometric discounting is not Pareto efficient. However, efficiency can be established by introducing a planner who controls the initial endowment and makes transfers over time. It is shown than any Pareto efficient allocation can be supported by a perfect equilibrium with transfers.
Volume (Year): 4 (2007)
Issue (Month): 43 ()
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