This note shows that, in case of suboptimal occupational choice, labor taxation can generate a relevant deadweight loss. With varying aptitudes in different occupations, individuals typically maximize income by specializing in one occupation which promises the highest income, but various labor market imperfections and uncertainties imply that the choice of the best occupation is accomplished with partial success. We use the multinomial Logit approach to evaluate the magnitude of the distortions due to errors in occupational choice caused by income taxation. Under plausible parameterization, we snow that the deadweight loss can be as high as a third of total income.

This note shows that, in case of suboptimal occupational choice, labor taxation can generate a relevant deadweight loss. With varying aptitudes in different occupations, individuals typically maximize income by specializing in one occupation which promises the highest income, but various labor market imperfections and uncertainties imply that the choice of the best occupation is accomplished with partial success. We use the multinomial Logit approach to evaluate the magnitude of the distortions due to errors in occupational choice caused by income taxation. Under plausible parameterization, we snow that the deadweight loss can be as high as a third of total income.

International environmental protection like the combat of global warming exhibits properties of public goods. In the international arena, no coercive authority exists that can enforce measures to overcome free-rider incentives. Therefore decentralized negotiations between individual regions serve as an approach to pursue efficient international environmental protection. We propose a scheme which is based on the ideas of Coasean negotiations and Pigouvian taxes. The negotiating entities offer side-payments to counterparts in order to influence their taxation of polluting consumption. Side-payments, in turn, are self-financed by means of externality-correcting taxes. As we show, a Pareto-efficient outcome can be attained. Copyright (c) The London School of Economics and Political Science 2009.

Individuals behave with choice probabilities defined by a multinomial logit (MNL) probability distribution over a finite number of alternatives which includes utilities as parameters. The salient feature of the model is that probabilities depend on the choice-set, or domain. Expanding the choice-set decreases the probabilities of alternatives included in the original set, providing positive probabilities to the added alternatives. The wider probability 'spread' causes some individuals to further deviate from their higher valued alternatives, while others find the added alternatives highly valuable. For a population with diverse preferences, there exists a subset of alternatives, called the optimum choice-set, which balances these considerations to maximize social welfare. The paper analyses the dependence of the optimum choice-set on a parameter which specifies the precision of individuals' choice ('degree of rationality'). It is proved that for high values of this parameter the optim

International environmental protection like the combat of global warming exhibits properties of public goods. In the international arena, no coercive authority exists that can enforce measures to overcome free-rider incentives. Therefore decentralized negotiations between individual regions serve as an approach to pursue efficient international environmental protection. We propose a scheme which is based on the ideas of Coasean negotiations and Pigouvian taxes. The negotiating entities offer side-payments to counterparts in order to influence their taxation of polluting consumption. Side-payments, in turn, are self-financed by means of externality-correcting taxes. As we show, a Pareto-efficient outcome can be attained. Copyright (c) The London School of Economics and Political Science 2009.

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The article reviews the book "Optimal Pricing, Inflation, and the Cost of Price Adjustment," edited by Eytan Sheshinski and Yoram Weiss.

We analyse a duopoly model where firms first choose locations on a line seqment and then choose quantities in the second stage. Pure strategy quantity equilibria fail to exist for locations close together. For low transport costs, near agglomeration occurs and the firms choose locations where pure strategy quantity equilibria exist. As transport costs rise, firms become less direct competitors as they move away from the centre of the market. /// La concurrence par les quantités dans un modèle spatial. Les auteurs analysent un modèle de duopole où les firmes choisissent d'abord leur localisation le long d'un segment linéaire et puis, dans un second temps, les quantités qu'elles désirent produire. On montre qu'il n'est pas possible d'établir l'existence d'équilibres pour de pures stratégies de quantités quand il s'agit de localisations trop rapprochées. Quand les coûts de transport sont faibles, il y a presqu' agglomération et les firmes choisissent des localisations telles que des équi

Massachusetts Institute of Technology. Dept. of Economics. Thesis. 1966. Ph.D. / Vita. / Includes bibliographies.