理论论文

Using the Uganda National Panel Survey, I document that farmers face a trade-off between crop yields and risk, that most grow both high- and low-yield crops, and that poorer farmers concentrate on the low-yield, low-risk ones. I then develop an incomplete-markets model with a crop-portfolio choice, in which households trade off income returns against consumption smoothing. Wealth-poor households optimally under-invest in intermediates and shift toward safer crops. Crop portfolios, intermediate input use, and the wealth distribution are jointly determined in equilibrium. The model also reproduces the low pass-through of both income inequality and income volatility into consumption. Calibrated to rural Uganda, it implies that completing markets raises agricultural productivity by 12.8%, with 15.8% of the gain coming from eliminating the misallocation of inputs across farmers and crops. Consumption rises by 17.6% and welfare by 17.4%, with income inequality rising slightly and consumption inequality unchanged.

Which countries drive global inequality? Which states drive US inequality? We characterize the class of inequality measures that can answer these questions, permitting both an additive decomposition by subgroup and a multiplicative decomposition into within- and between-group components. Its central measure is simply the expected ratio of incomes between two randomly selected individuals. We show that global inequality fell since 1990, driven by declining disparities between countries. Inequality is primarily driven by large middle-income countries (India, China) and poor countries (Democratic Republic of Congo, Ethiopia). In the US, rising inequality is explained by widening gaps within states, while between-state inequality remains limited.

Many people are impatient. We introduce domain-specific discounting to a contracting model and test a strategy for improving incentives when people are impatient over effort: implement time-bundled contracts that make the payment for future effort increase in current effort. Using a randomized evaluation of an exercise incentive program among diabetics in India, we find that time-bundled contracts generate equivalent effort to time-separable contracts at 15 percent lower cost. Moreover, they perform 30 percent better among individuals with above-median effort impatience. Pooled across contracts, incentives increase steps by 20 percent and improve blood sugar relative to a control group. (JEL D86, D91, I12, I18, O12)

This paper develops a structural framework for analyzing top income taxation and applies it to six decades of U.S. tax history and to eight other advanced economies. The paper derives explicit expressions for top-bracket tax revenue and total excess burden across the full range of tax rates, while preserving local consistency with the sufficient-statistics approach of Saez (2001). Applied to the United States, the analysis implies that the current excess burden of the top federal tax bracket is $101 billion and that raising the top marginal tax rate to its revenue-maximizing level of 72 percent would increase annual revenue by $111 billion, given a taxable income elasticity of 0.25. The current tax rate is lower than what is consistent with a purely utility-based notion of social welfare. By contrast, Nordic countries and the United States in earlier decades appear to have operated at tax rates exceeding revenue-maximizing levels.

As shortages of essential resources become more frequent, high prices alone may fail to curb demand. We study power limits for residential electricity, which restrict household consumption rather than setting it to zero as in rolling blackouts. We show theoretically and empirically that power limits can deliver electricity savings equivalent to sizable blackouts while affecting fewer households. The mechanism works through selection of high users, creating distributional trade-offs that depend on whether limits are uniform or proportional to contracted power. This highlights the potential of smart meters to improve shortage management while preserving access to essential electricity services.

Should public policies address inequality due to heterogeneous life expectancy? Intuitively, taking a short life as a disadvantage, such policies should favor those with high mortality. Yet, pension systems implicitly redistribute from low-life-expectancy to high-life-expectancy people. Moreover, this direction of redistribution is optimal from the perspective of the standard utilitarian welfare criterion. We study mortality-related redistribution in a more flexible setting. We start by establishing a formal framework for the analysis by clearly distinguishing between redistribution along the mortality and income dimensions. We then characterize the conditions under which it is optimal to redistribute toward high-mortality people. One such condition is that the welfare criterion must feature an aversion to lifetime inequality that exceeds the aversion to consumption inequality.

This paper studies the optimal combination of government grants that provide direct public funding to nonprofits and tax incentives that reduce the cost of charitable giving. When nonprofits face high fundraising costs to attract donors, tax incentives cannot fully replace grants, which remain part of the optimal funding policy. When fundraising costs are sufficiently low, a government that can tailor tax incentives across causes can finance some causes entirely through donations. However, when cause-specific tax differentiation is unavailable, grants remain necessary to accommodate differences in funding needs across causes. In a calibrated example, imposing a uniform tax treatment of donations across charitable causes raises the optimal share of nonprofit funding covered by grants from 0 to 60%.

We study technology investment and public good provision in a setting where two parties with differing valuations of the public good alternate in power. In each period, the incumbent chooses public good provision and invests in technology that lowers the cost of future public good provision. We characterize Markov perfect equilibria and show how polarization and irreversibility of investment jointly shape long-run outcomes. When polarization is low, power turnover may increase expected technology investment and public good provision, and steady-state outcomes are unaffected by the degree of reversibility. When polarization is high, however, irreversibility becomes important: the party favoring the public good invests more aggressively, and irreversible investment induces higher public good provision by both parties. As polarization rises, expected technology stock and public good provision initially decline but jump upward once the irreversibility constraint binds.

A designer employs a dynamic protocol to elicit private information. Protocols produce a set of contextual privacy violations—information learned that may be superfluous given the context. A protocol is maximally contextually private if there is no protocol that produces a proper subset of the violations it produces, while implementing the choice rule. Contextual privacy violations arise when a choice rule makes some agents collectively, but not individually, pivotal. In auctions, designing for contextual privacy requires choosing an initial question posed to each agent and the order for querying agents. Ascending-join protocols are maximally contextually private for k-item Vickrey auctions. (JEL D44, D82)

The political economy setting of voting over general nonlinear income taxes with labor disincentives and information asymmetry in consumer/worker/voter types is considered. Agents do not communicate or coordinate with each other. The economy is the realization of a finite draw from a continuous distribution. The revenue required from a draw is determined by Pareto optimal provision of a public good for that draw. Assuming that the government must meet the revenue requirement for any possible draw, in other words the tax is robust, a majority rule equilibrium is shown to exist at the median voter’s preferred tax function out of this robust set. The key restrictions on utility are additive separability, quasi-linearity, and that utility from the public good is multiplicative in type.

A principal hires an agent to learn about the cost of a project (experimentation) and then to execute it (production). The agent is privately informed about the probability that the cost is low, with the high-type agent more optimistic than the low type. Learning is modeled as a series of experiments, where the agent privately chooses his effort in each experiment. Due to the joint presence of adverse selection and moral hazard, even the low type can misrepresent his type, shirk during experimentation and earn a rent. In the optimal contract, the principal uses the length and outcome of experimentation as well as the timing of payments to induce effort and screen the agent. The principal may find it optimal to reward the low type after failure in experimentation. We provide sufficient conditions for both success and failure to be rewarded. We show that over-experimentation can be optimal as it reduces the asymmetric information after a series of failed experiments. We also consider whether it may be optimal to separate experimentation and production between two different agents. When the same agent works on both tasks, the principal can leverage the adverse selection rent to mitigate moral hazard. Therefore, integrating experimentation and production is optimal when adverse selection is severe.

We develop a simple and intuitive Pigouvian perspective on optimal trade policy. Our approach unifies a wide range of rationales for taxing trade, from the classical optimal tariff argument to contemporary debates about global carbon emissions and geopolitics. We also clarify when trade policy intervention is warranted and when alternative domestic instruments should be used instead.

We study optimal bailout policies amidst banking and sovereign crises. Our model features sovereign borrowing with limited commitment, where domestic banks hold government debt and extend credit to the private sector. Bank capital shocks can trigger banking crises, prompting the government to consider extending guarantees over bank assets. This poses a trade-off: Larger bailouts relax financial frictions and increase output, but increase fiscal needs and default risk (creating a ‘diabolic loop’). Optimal bailouts exhibit clear properties. The fraction of banking losses the bailouts cover is (i) decreasing in government debt; (ii) increasing in aggregate productivity; and (iii) increasing in the severity of banking crises. Even though bailouts mitigate the adverse effects of banking crises, the economy is ex ante better off without bailouts: Having access to bailouts lowers the cost of defaults, which in turn increases the default frequency, and reduces the levels of debt, output, and consumption.

We study the uneven effects of a commodity cycle, documenting its impact across workers based on their skill level and the region where they live. To this end, we develop a dynamic quantitative model of a multi-region economy featuring spatial linkages (interregional trade and migration) and downward wage rigidity. Empirically, we focus on Brazil’s experience during the commodity boom of the 2000s and subsequent bust of the 2010s. The skill premium falls during the boom, while the extent of downward wage rigidity determines whether it reverts or maintains its decline during the bust. In addition, there is substantial heterogeneity across Brazilian states in the gains from the commodity cycle. Finally, we build counterfactuals to show that both spatial linkages (interregional migration and interregional trade) and downward wage rigidity jointly shape the impact of the commodity cycle on the skill premium, real wages, unemployment, and spatial disparities.

We consider five models of international trade that belong to the class of models in which the trade elasticity and domestic trade share are sufficient statistics for the welfare cost of autarky. Three are fixed-variety models featuring increasing micro-level margins of adjustment: versions of the Armington model, the Ricardian model, and its variable-markup counterpart. Two are endogenous-variety models featuring monopolistic competition: versions of the Krugman model and the Melitz model. For the three fixed-variety models, we show theoretically that, although they imply the same mapping from the trade elasticity to welfare, they imply different mappings from the trade elasticity to observed order statistics of price gaps of identical goods across countries. This result implies that choosing the parameter that governs the elasticity of trade to match the same order statistics in the data differentially impacts each model’s measured welfare cost of autarky. We quantify these differences for all five models.

This paper proposes a framework for assessing whether misspecified decision-makers would be willing to pay for information that can potentially make them less misspecified. We introduce a prior-free approach, based on “constrained” maximal regret, to derive an upper bound on the subjective assessment of potential gains from acquiring a more accurate model. The constraint stems from the information currently available to the decision-maker. We apply our approach to three prominent models of misspecified beliefs: coarse expectations, causal misperceptions, and sampling equilibria. (JEL D83, D84, D91)

People participate in protests even though it is costly, benefits are not exclusive to participants, and each individual is unlikely to be pivotal. Building on these characteristics, I propose a sequential model of protest formation where opportunities to participate arrive stochastically, and the protest succeeds if participation surpasses a threshold. I show a unique equilibrium exists and characterize its dynamics. If the unique equilibrium involves participation, the time between participation decisions shortens as the protest progresses—a pattern observed empirically. A player with an opportunity becomes sequentially pivotal if, after abstaining, the protest will likely end before another opportunity arrives. (JEL D72, D84, D91)

We study misperceptions of private-signal correlation in an incomplete-information Cournot duopoly game. Exaggerating the correlation between players' demand signals is beneficial when agents hold flexible beliefs about price elasticity but is harmful when their beliefs are dogmatically correct. For agents with flexible beliefs who learn elasticity by observing prices, correlation misperceptions indirectly distort behavior through elasticity misinference. If agents know the true elasticity, this learning channel is eliminated. Correlation misperceptions have opposite direct and indirect effects on behavior, so the presence of elasticity inference can reverse an error's viability. (JEL C72, D21, D43, D81, D82, D83)

We study a data provider's problem of optimally designing and selling marketing lists that enable a retailer with private types to access consumers with heterogeneous characteristics. When virtual values satisfy a particular form of convexity (named boundary dominance), under certain regularity conditions, the optimal mechanism comprises fully revealing marketing lists, irrespective of whether the retailer's types are vertically or horizontally ordered. Moreover, in the vertical case, the optimal mechanism allows a simple “fixed-price” implementation. In the horizontal case, it exhibits no-exclusion and rotation properties. Conversely, if boundary dominance is violated, the optimal mechanism may not be fully revealing. (JEL D82, L81, M31)

We study the welfare effects of price discrimination in a duopoly with both captive and contested consumers. Using a unified information design approach, we characterize the best and worst market segmentations for producer surplus, consumer surplus, and social surplus. The firm-optimal segmentation, which divides the market into two nested segments, consistently reduces consumer welfare relative to uniform pricing. The consumer-optimal segmentation, which divides the market into a symmetric segment and a nested segment, may sometimes yield a Pareto improvement but does not necessarily coincide with the social-optimal segmentation. (JEL D43, D83)