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Dominik Sachs, Aleh Tsyvinski et Nicolas Werquin
n° 19-1047, novembre 2019
We study the incidence of nonlinear labor income taxes in an economy with a continuum of endogenous wages. We derive in closed form the effects of reforming nonlinearly an arbitrary tax system, by showing that this problem can be formalized as an integral equation. Our tax incidence formulas are...
Patrick Fève, Pablo Garcia Sanchez, Alban Moura et Olivier Pierrard
n° 19-1048, novembre 2019
We augment a simple Real Business Cycle model with financial intermediaries that may default on their liabilities and a financial friction generating social costs of default. We provide a closed-form solution for the general equilibrium of the economy under specific assumptions, allowing for...
Felix Bierbrauer, Aleh Tsyvinski et Nicolas Werquin
n° 19-1050, novembre 2019
We develop a model of political competition with endogenous platform choices of parties and endogenous turnout. A main finding is that a party that is leading in the polls has an incentive to cater primarily to the core voters of the opposing party. A party that is lagging behind, by contrast, has...
Aleh Tsyvinski et Nicolas Werquin
n° 19-1051, novembre 2019
Economic disruptions (techonological change, trade liberalization, immigration flows) generally create winners and losers, i.e., wage gains for some individuals and wage losses for others. The compensation problem consists of designing a reform of the existing income tax system that offsets the...
Farid Gasmi et Philip Hanspach
n° 19-1052, novembre 2019
This article proposes a two-country model of electricity trade under peak-load pricing. We apply the model to France and the UK to assess the benefit to the UK of trade within the European internal energy market (IEM). Calibration and simulations of the model aimed at simulating bilateral trade in...
Emmanuelle Auriol, Diego Delissaint, Maleke Fourati, Josepa Miquel-Florensa et Paul Seabright
n° 19-1053, novembre 2019
We conducted an experimental study in Haiti testing for the relationship between religious belief and individual risk taking behavior. 774 subjects played lotteries in a standard neutral protocol and subsequently with reduced endowments but in the presence of religious images of Catholic,...
Matthew Adler, Maddalena Ferranna, James K. Hammitt et Nicolas Treich
n° 19-1054, novembre 2019
The social value of risk reduction (SVRRi) is the marginal social value of reducing an individual’s fatality risk, as measured by some social welfare function (SWF). This Article investigates SVRR, using a lifetime utility model in which individuals are differentiated by age, lifetime income...
Boris Van Leeuwen et Ingela Alger
n° 19-1056, novembre 2019, révision novembre 2023
Theory suggests that a form of Kantian morality has evolutionary founda- tions. To investigate the relative importance of Kantian morality and social preferences, we run a laboratory experiment on strategic interaction in social dilemmas. We struc- turally estimate social preferences and Kantian...
Stefan Ambec et Claude Crampes
vol. 6, n° 6, novembre 2019, p. 919–948
We examine policy instruments that aim to decarbonize electricity production by replacing fossil fuel energy with intermittent renewable sources, namely, wind and solar power. We consider a model of investment, production, and storage with two sources of energy: one is clean but intermittent (wind...
David Austen-Smith, Wioletta Dziuda, Bård Harstad et Antoine Loeper
vol. 14, n° 4, novembre 2019, p. 1483–1534
Why do rational politicians choose ine¢ cient policy instruments? Environmental regulation for example, often takes the form of technology standards and quotas even when cost-effective Pigou taxes are available. To shed light on this puzzle, we present a stochastic game with multiple legislative...
