Political Competition and Mirrleesian Income Taxation: A First Pass

We study Downsian competition in a Mirrleesian model of income taxation. The competing politicians may differ in competence. If politicians engage in vote-share maximization, the less competent politician’s policy proposals are attractive to the minority of rich agents, whereas those of the competent politician are attractive to the majority of poor agents. The less competent politician wins with positive probability, which gives rise to a political failure in the sense of Besley and Coate (1998). Political failures are avoided if politicians maximize winning probabilities. Nevertheless, the two equilibria cannot be Pareto-ranked, the minority may be better off under vote-share maximization.electoral competition, non-linear income taxation, candidate quality

Politically Feasible Reforms of Non-Linear Tax Systems

We study reforms of nonlinear income tax systems from a political economy perspective. We present a median voter theorem for monotonic tax reforms, reforms so that the change in the tax burden is a monotonic function of income. We also provide an empirical analysis of tax reforms, with a focus on the United States. We show that past reforms have, by and large, been monotonic. We also show that support by the median voter was aligned with majority support in the population. Finally, we develop sufficient statistics that enable to test whether a given tax system admits a politically feasible reform

Essays on public goods provision and income taxation

This dissertation is concerned with the characterization of schemes of taxation and public good provision that are optimal from a welfare perspective. The analysis is based on the assumption that individuals are privately informed about their valuation of the public good and that an optimal rule for public good provision reflects this information. As a consequence, an optimal provision rule has to be based on some procedure of information aggregation that allows this information to be acquired. The tax system is a key determinant for the task of information aggregation. If individuals are asked to communicate their valuation of the public good to "the system", they compare the utility gain from a larger level of public good provision to the utility burden that results from the need to generate larger tax revenues to cover the costs of public good provision. Individuals will hence communicate their "true" valuation of the public good only if these two forces are commensurate. These considerations demonstrate that the problem of finding an optimal tax system is intertwined with the problem of finding an optimal rule for an informed decision on public good provision. An analysis based on the presumption that information on public goods preferences just happens to be available is too naive. Individuals might refuse to reveal this information because a higher level of public spending affects their personal tax bill. This concern is the topic of this dissertation. Each chapter contains a characterization of optimal tax schemes and provision rules under the premise that information on public goods preferences needs to be acquired. A theory of optimal taxation and public good provision in the presence of uncertainty identifies outcomes that take specific constraints into account and are optimal under a given welfare function. Institutional constraints determine the set of tax instruments used for public goods finance. Technological constraints enter the analysis via the cost of public good provision that determines the tax revenue requirement in the public sector budget constraint. Finally, there are informational constraints. Individuals are privately informed about their public goods preferences. Hence, an optimal policy can use only those pieces of information that individuals are indeed willing to reveal to the system. Considerations of political feasibility enter the analysis via this latter set of constraints. Information can be acquired only if it is used in a way that is in line with the interests of individuals. These interests in turn are shaped by the tax system and the provision rule for public goods. The derivation of a normative benchmark that takes all these constraints into account is of limited use when it comes to recommendations for actual public policy. However, it provides a better understanding of their interplay and of the restrictions that become effective even under an ideal tax system. For instance, chapter 4 of this dissertation identifies a tradeoff between the desire to have an optimal redistributive tax system for a given level of public good provision and the problem of acquiring the information that is needed to determine the optimal quantity of the public good. It is shown that these two tasks can not be achieved simultaneously; that is, even the best policy-maker is not able to escape this problem. In more abstract terms, a theory of optimal taxation, public good provision and information acquisition yields a characterization of constrained efficient allocations. In addition, with a given welfare assessment, optimal constrained efficient allocations can be studied. As an example, it is shown in chapter 4 that a constrained efficient utilitarian tax system displays a complementarity between the extent of redistribution and the decision on public good provision -- relative to a situation where informational constraints are not taken into account

Black swans or dragon kings? A simple test for deviations from the power law

We develop a simple test for deviations from power law tails, which is based on the asymptotic properties of the empirical distribution function. We use this test to answer the question whether great natural disasters, financial crashes or electricity price spikes should be classified as dragon kings or 'only' as black swans

On 1-factorizations of Bipartite Kneser Graphs

It is a challenging open problem to construct an explicit 1-factorization of the bipartite Kneser graph $H(v,t)$, which contains as vertices all $t$-element and $(v-t)$-element subsets of $[v]:=\{1,\ldots,v\}$ and an edge between any two vertices when one is a subset of the other. In this paper, we propose a new framework for designing such 1-factorizations, by which we solve a nontrivial case where $t=2$ and $v$ is an odd prime power. We also revisit two classic constructions for the case $v=2t+1$ --- the \emph{lexical factorization} and \emph{modular factorization}. We provide their simplified definitions and study their inner structures. As a result, an optimal algorithm is designed for computing the lexical factorizations. (An analogous algorithm for the modular factorization is trivial.)Comment: We design the first explicit 1-factorization of H(2,q), where q is a odd prime powe

Critical illness polyneuropathy in ICU patients is related to reduced motor nerve excitability caused by reduced sodium permeability

Background: Reduced motor and sensory nerve amplitudes in critical illness polyneuropathy (CIP) are characteristic features described in electrophysiological studies and due to dysfunction of voltage-gated sodium channels. Yet, faulty membrane depolarization as reported in various tissues of critically ill patients may cause reduced membrane excitability as well. The aim of this study was to compare the pathophysiological differences in motor nerve membrane polarization and voltage-gated sodium channel function between CIP patients and critically ill patients not developing CIP during their ICU stay (ICU controls). Methods: ICU patients underwent electrophysiological nerve conduction studies and were categorized as either ICU controls or CIP patients. Subsequently, excitability parameters were recorded as current-threshold relationship, stimulus-response behavior, threshold electrotonus, and recovery of excitability from the abductor pollicis brevis following median nerve stimulation. Results: Twenty-six critically ill patients were enrolled and categorized as 12 ICU controls and 14 CIP patients. When compared to 31 healthy subjects, the ICU controls exhibited signs of membrane depolarization as shown by reduced superexcitability (p = 0.003), depolarized threshold electrotonus (p = 0.007), increased current-threshold relationship (p = 0.03), and slightly prolonged strength-duration time constant. In contrast, the CIP patients displayed a significantly reduced strength-duration time constant (p < 0.0001), which indicates an increased inactivation of voltage-gated sodium channels. Conclusions: Abnormal motor nerve membrane depolarization is a general finding in critically ill patients whereas voltage-gated sodium channel dysfunction is a characteristic of CIP patients

Quantum fingerprinting

Classical fingerprinting associates with each string a shorter string (its fingerprint), such that, with high probability, any two distinct strings can be distinguished by comparing their fingerprints alone. The fingerprints can be exponentially smaller than the original strings if the parties preparing the fingerprints share a random key, but not if they only have access to uncorrelated random sources. In this paper we show that fingerprints consisting of quantum information can be made exponentially smaller than the original strings without any correlations or entanglement between the parties: we give a scheme where the quantum fingerprints are exponentially shorter than the original strings and we give a test that distinguishes any two unknown quantum fingerprints with high probability. Our scheme implies an exponential quantum/classical gap for the equality problem in the simultaneous message passing model of communication complexity. We optimize several aspects of our scheme.Comment: 8 pages, LaTeX, one figur

Perfect Secrecy Systems Immune to Spoofing Attacks

We present novel perfect secrecy systems that provide immunity to spoofing attacks under equiprobable source probability distributions. On the theoretical side, relying on an existence result for $t$-designs by Teirlinck, our construction method constructively generates systems that can reach an arbitrary high level of security. On the practical side, we obtain, via cyclic difference families, very efficient constructions of new optimal systems that are onefold secure against spoofing. Moreover, we construct, by means of $t$-designs for large values of $t$, the first near-optimal systems that are 5- and 6-fold secure as well as further systems with a feasible number of keys that are 7-fold secure against spoofing. We apply our results furthermore to a recently extended authentication model, where the opponent has access to a verification oracle. We obtain this way novel perfect secrecy systems with immunity to spoofing in the verification oracle model.Comment: 10 pages (double-column); to appear in "International Journal of Information Security

Lower bound for the quantum capacity of a discrete memoryless quantum channel

We generalize the random coding argument of stabilizer codes and derive a lower bound on the quantum capacity of an arbitrary discrete memoryless quantum channel. For the depolarizing channel, our lower bound coincides with that obtained by Bennett et al. We also slightly improve the quantum Gilbert-Varshamov bound for general stabilizer codes, and establish an analogue of the quantum Gilbert-Varshamov bound for linear stabilizer codes. Our proof is restricted to the binary quantum channels, but its extension of to l-adic channels is straightforward.Comment: 16 pages, REVTeX4. To appear in J. Math. Phys. A critical error in fidelity calculation was corrected by using Hamada's result (quant-ph/0112103). In the third version, we simplified formula and derivation of the lower bound by proving p(Gamma)+q(Gamma)=1. In the second version, we added an analogue of the quantum Gilbert-Varshamov bound for linear stabilizer code