Public Goods and Optimal Paternalism under Present-Biased Preferences
This 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.
|Date of creation:||01 Jun 2010|
|Note:||Public Goods; Quasi-Hyperbolic Discounting; Redistribution; Asymmetric Information|
|Contact details of provider:|| Postal: HUI Research, Regeringsgatan 60, 103 29 Stockholm, Sweden|
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- Pirttila, Jukka & Tuomala, Matti, 2001. "On optimal non-linear taxation and public good provision in an overlapping generations economy," Journal of Public Economics, Elsevier, vol. 79(3), pages 485-501, March.
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- O'Donoghue, Ted & Rabin, Matthew, 1997.
"Doing It Now or Later,"
Department of Economics, Working Paper Series
qt7t44m5b0, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
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- Ted O'Donoghue & Matthew Rabin, 1996. "Doing It Now or Later," Discussion Papers 1172, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- W. Viscusi & Joel Huber & Jason Bell, 2008. "Estimating discount rates for environmental quality from utility-based choice experiments," Journal of Risk and Uncertainty, Springer, vol. 37(2), pages 199-220, December.
- Aronsson, Thomas & Johansson-Stenman, Olof, 2009.
"Positional Concerns In An Olg Model: Optimal Labor And Capital Income Taxation,"
Working Papers in Economics
355, University of Gothenburg, Department of Economics.
- Thomas Aronsson & Olof Johansson‐Stenman, 2010. "Positional Concerns In An Olg Model: Optimal Labor And Capital Income Taxation," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 51(4), pages 1071-1095, November.
- Ted O'Donoghue & Matthew Rabin, 2005.
"Optimal Sin Taxes,"
784828000000000346, UCLA Department of Economics.
- Thaler, Richard, 1981. "Some empirical evidence on dynamic inconsistency," Economics Letters, Elsevier, vol. 8(3), pages 201-207.
- Aronsson, Thomas & Thunström, Linda, 2008. "A note on optimal paternalism and health capital subsidies," Economics Letters, Elsevier, vol. 101(3), pages 241-242, December.
- Ted O'Donoghue & Matthew Rabin, 2003. "Studying Optimal Paternalism, Illustrated by a Model of Sin Taxes," American Economic Review, American Economic Association, vol. 93(2), pages 186-191, May.
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