Temptation and Taxation
نویسندگان
چکیده
In this paper we attempt to (i) extend the competitive equilibrium neoclassical growth model to incorporate consumer preferences that feature temptation and selfcontrol as in the framework developed by Gul and Pesendorfer; (ii) use the model to analyze taxation and welfare; and (iii) extend and specialize the Gul-Pesendorfer temptation formulation to be dynamic and, in particular, quasi-geometric, thus providing a link to, and possibly an interpretation of, the Laibson model. ∗We thank Wolfgang Pesendorfer for important suggestions and help throughout this project. Krusell and Kuruşçu are at the University of Rochester; Smith is at Carnegie Mellon University. We thank seminar participants at Arizona State University, Carnegie Mellon University, Duke University, Harvard University, Johns Hopkins University, New York University, Princeton University, Yale University, and the 2001 North American Summer Meetings of the Econometric Society for helpful comments. Krusell and Smith thank the National Science Foundation for financial support.
منابع مشابه
Temptation and Taxation by per Krusell,
We study optimal taxation when consumers have temptation and self-control problems. Embedding the class of preferences developed by Gul and Pesendorfer into a standard macroeconomic setting, we first prove, in a two-period model, that the optimal policy is to subsidize savings when consumers are tempted by “excessive” impatience. The savings subsidy improves welfare because it makes succumbing ...
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