Redistribution by means of lotteries
Stéphane Gauthier
(1, 2)
,
Guy Laroque
(3, 4, 5)
Stéphane Gauthier
- Fonction : Auteur
- PersonId : 534
- IdHAL : stephane-gauthier
- ORCID : 0000-0002-6952-3497
- IdRef : 068987870
Guy Laroque
- Fonction : Auteur
- PersonId : 966769
- IdHAL : guy-laroque
- ORCID : 0000-0003-1109-4703
- IdRef : 026966832
Résumé
A government designs anonymous income transfers between a continuum of citizens whose income valuation is privately known. When transfers are deterministic, the incentive constraints imply equal treatment independently of the government's taste for redistribution. We study whether random transfers may locally improve upon the egalitarian outcome. A suitable Taylor expansion offers an approximation of the utility function by a quasilinear function. The methodology developed by Myerson to deal with incentive constraints then yields a necessary and sufficient condition for the existence of a socially useful randomization. When this condition is met a large set of lotteries are locally improving. A special menu made of two lotteries only is of interest: all the agents with low risk aversion receive the same random transfer, financed by a deterministic tax paid by the high risk aversion agents.
Domaines
Economies et financesFormat du dépôt | Notice |
---|---|
Type de dépôt | Article dans une revue |
Titre |
en
Redistribution by means of lotteries
|
Résumé |
en
A government designs anonymous income transfers between a continuum of citizens whose income valuation is privately known. When transfers are deterministic, the incentive constraints imply equal treatment independently of the government's taste for redistribution. We study whether random transfers may locally improve upon the egalitarian outcome. A suitable Taylor expansion offers an approximation of the utility function by a quasilinear function. The methodology developed by Myerson to deal with incentive constraints then yields a necessary and sufficient condition for the existence of a socially useful randomization. When this condition is met a large set of lotteries are locally improving. A special menu made of two lotteries only is of interest: all the agents with low risk aversion receive the same random transfer, financed by a deterministic tax paid by the high risk aversion agents.
|
Auteur(s) |
Stéphane Gauthier
1, 2
, Guy Laroque
3, 4, 5
1
PJSE -
Paris Jourdan Sciences Economiques
( 1171428 )
- 48 boulevard Jourdan 75014 Paris
- France
2
PSE -
Paris School of Economics
( 301309 )
- 48 boulevard Jourdan 75014 Paris
- France
3
UCL -
University College of London [London]
( 300875 )
- Gower Street, London WC1E 6BT
- Royaume-Uni
4
IFS -
Laboratory of the Institute for Fiscal Studies
( 163521 )
- The Institute for Fiscal Studies 7 Ridgmount Street, London WC1E 7AE.
- Royaume-Uni
5
ECON -
Département d'économie (Sciences Po)
( 226874 )
- 28 rue des Saints-Pères - 75007 Paris
- France
|
Volume |
169
|
Page/Identifiant |
707-716
|
Nom de la revue |
|
Langue du document |
Anglais
|
Vulgarisation |
Non
|
Comité de lecture |
Oui
|
Audience |
Internationale
|
Date de publication |
2017-05
|
Domaine(s) |
|
Projet(s) ANR |
|
Mots-clés |
en
Lerner egalitarianism, Random redistribution, Incentives
|
DOI | 10.1016/j.jet.2017.04.002 |
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