Online Appendix for “Optimal Taxation with Behavioral Agents”
نویسنده
چکیده
12.1.1 Hybrid Model: Agent maximizing the wrong utility function with the wrong prices Suppose now an agent with true problem max (c) s.t. (p c) ≤ , but who maximizes smax| (c) s.t. (p c) ≤ with both the wrong utility and the wrong prices. This is hybrid of the two previous models. In terms of decision (if not welfare), the agent is a misperceiving agent with utility and perceived prices p. Call (p ) = (c (p )) and h (p b ) = argmin (p c) s.t. (c) ≥ b the indirect utility function (of that misperceiving agent) and the rational compensated demand of that agent with utility . Then, our agent has demand:
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