The Provision and Pricing of Excludable Public Goods: Ramsey-Boiteux Pricing versus Bundling

This paper studies the relation between Bayesian mechanism design and the Ramsey-Boiteux approach to the provision and pricing of excludable public goods. For a large economy with private information about individual preferences, the two approaches are shown to be equivalent if and only if, in addition to incentive compatibility and participation constraints, the .nal allocation of private-good consumption and admission tickets to public goods satis.es a condition of renegotiation proofness. Without this condition, a mechanism involving mixed bundling, i.e. combination tickets at a discount, is superior.Mechanism Design, Excludable Public Goods, Ramsey-Boiteux Pricing, Renegotiation Proofness, Bundling

Optimal Income Taxation, Public-Goods Provision and Public-Sector Pricing: A Contribution to the Foundations of Public Economics

The paper develops an integrated model of optimal nonlinear income taxation, public-goods provision and pricing in a large economy. With asymmetric information about labour productivities and publicgoods preferences, the multidimensional mechanism design problem becomes tractable by requiring renegotiation proofness of the final allocation of private goods and admission tickets for excludable public goods. Under an affiliation assumption on the underlying distribution, optimal income taxation, public-goods provision and admission fees have the same qualitative properties as in unidimensional models. These properties are obtained for utilitarian welfare maximization and for a Ramsey-Boiteux formulation with interim participation constraints.Optimal Income Taxation, Public Goods, Public-Sector Pricing, Multidimensional Mechanism Design, Ramsey-Boiteux Pricing

The Effects of Market Structure on Industry Growth: Rivalrous Non-excludable Capital

We analyze imperfect competition in dynamic environments where firms use rivalrous but nonexcludable industry-specific capital that is provided exogenously. Capital depreciation depends on utilization, so firms influence the evolution of the capital equipment through more or less intensive supply in the final-goods market. Strategic incentives stem from, (i) a dynamic externality, arising due to the non-excludability of the capital stock, leading firms to compete for its use (rivalry), and, (ii) a market externality, leading to the classic Cournot-type supply competition. Comparing alternative market structures, we isolate the effect of these externalities on strategies and industry growth.

For-Profit, State, and Nonprofit: How to Cut the Pie Among the Three Sectors

What is the best way to deliver various goods and services in the advanced complex economy? What is the appropriate division of labor among the state, the private for-profit, and the nonprofit sectors? This paper explores these questions relative to the well-being of consumers, and offers a set of broad answers grounded in a benefit-cost analysis that balances (1) the relative value derived by consumers and customers from their relations with organizations from the three sectors, and (2) the relative efficiency of the internal organization of these types of organizations. The paper illustrates this benefit-cost analysis in the context of several industries.Three-Sector Economy, Division of labor among for-profit firms, state, and nonprofit organizations, Organization-consumer interface, Comparative analysis of agency problems, Production of public goods

An Account of Contributive Justice

In The Myth of Ownership, Liam Murphy and Thomas Nagel argue that achieving fairness in taxation is principally a matter of distributive justice. Distributive justice can be understood as being concerned with what is owed to people as a matter of justice. For Nagel and Murphy, fairness in tax schemes is subsumed to the question of distributive justice: fairly allocated tax liabilities are just those that are compatible with the preferred theory of distributive justice. Subsuming assessments of tax fairness to distributive justice, however, overlooks the following possibility: that the question of how we ought to divvy up tax liabilities, and the burdens associated with running a society more generally, requires different, non-distributive considerations of justice. These are considerations of justice that aren’t essentially about distributive justice at all. I argue here that the division of burdens in a society is specifically a matter of contributive justice. Contributive justice is concerned with what people owe as a matter of justice, rather than what is owed to them. It makes the division of burdens itself evaluative salient in assessments of fairness. Even a comprehensive specification of distributive justice leaves indeterminate how the burdens of running a society should be fairly divided up. Each of the chapters in this dissertation develops one part of an account of contributive justice. I first make conceptual space for an account of contributive justice. By taking Murphy and Nagel’s lead, and working within the post-distribution, a distinctive need for principles of justice in contribution can be shown. Murphy and Nagel decline to introduce non-distributive principles for guiding the provision of post-distributive public goods. Instead, they favor efficiency in determining the provision of post-distributive of public goods. I show that contributive justice is genuinely distinct from both efficiency and distributive justice. I also identify one respect in which principles of contributive justice should bear: that of determining the financing and delivery and civic cultural public goods. I then argue that a principle of contribution in accordance with ability (a principle of “ability-to-pay”, or “ability-to-contribute”, for short) stands out as a candidate principle of contributive justice. The version of ability-to-pay that I defend is, in particular, a deontic principle of ability-to-pay. I show that a deontic principle of ability-to-pay is more closely allied with a view of society as a cooperative enterprise than utilitarian versions of ability-to-pay. An account of ability to contribute is developed by grafting a notion of opportunity cost onto Amartya Sen’s capability theory. Lastly, I incorporate contributive justice in an account of contributive legitimacy. Contributive legitimacy gives us a set of conditions under which the state’s use of coercive force to extract tax contributions is legitimate, and hence justified. Drawing on empirical evidence from the development and fiscal sociology literature, I show that contributive legitimacy in a state’s tax extraction practices is essential to rule of law, and the avoidance of kleptocratic authoritarianism. Contributive legitimacy supplements our understanding of conventional notions of political legitimacy and helps us identify possible failures of political legitimacy. These are failures that might be overlooked were we to focus solely on distribution.PHDPhilosophyUniversity of Michigan, Horace H. Rackham School of Graduate Studieshttps://deepblue.lib.umich.edu/bitstream/2027.42/147526/1/kwchuang_1.pd

Optimal Income Taxation, Public-Goods Provision

The paper develops an integrated model of optimal nonlinear income taxation, public-goods provision and pricing in a large economy. With asymmetric information about labour productivities and publicgoods preferences, the multidimensional mechanism design problem becomes tractable by requiring renegotiation proofness of the final allocation of private goods and admission tickets for excludable public goods. Under an affiliation assumption on the underlying distribution, optimal income taxation, public-goods provision and admission fees have the same qualitative properties as in unidimensional models. These properties are obtained for utilitarian welfare maximization and for a Ramsey-Boiteux formulation with interim participation constraints.

The effects of market structure on industry growth: rivalrous nonexcludable capital

Author's draft issued as working paper dated September 2005. Final version available online at http://www.sciencedirect.com/We analyze imperfect competition in dynamic environments where firms use rivalrous but nonexcludable industry-specific capital that is provided exogenously. Capital depreciation depends on utilization, so firms influence the evolution of the capital equipment through more or less intensive supply in the final-goods market. Strategic incentives stem from, (i) a dynamic externality, arising due to the non-excludability of the capital stock, leading firms to compete for its use (rivalry), and, (ii) a market externality, leading to the classic Cournot-type supply competition. Comparing alternative market structures, we isolate the effect of these externalities on strategies and industry growth