Related papers: Optimal Taxation under Imperfect Trust
We demonstrate how a static optimal income taxation problem can be analyzed using dynamical methods. Specifically, we show that the taxation problem is intimately connected to the heat equation. Our first result is a new property of the…
A knowledge system S describing a part of real world does in general not contain complete information. Reasoning with incomplete information is prone to errors since any belief derived from S may be false in the present state of the world.…
This paper develops new tools to quantify uncertainty in optimal decision making and to gain insight into which variables one should collect information about given the potential cost of measuring a large number of variables. We investigate…
Real data are rarely pure. Hence the past half-century has seen great interest in robust estimation algorithms that perform well even when part of the data is corrupt. However, their vast majority approach optimal accuracy only when given a…
We study the Inexact Restoration framework with random models for minimizing functions whose evaluation is subject to errors. We propose a constrained formulation that includes well-known stochastic problems and an algorithm applicable when…
Confidence is a fundamental concept in statistics, but there is a tendency to misinterpret it as probability. In this paper, I argue that an intuitively and mathematically more appropriate interpretation of confidence is through…
In multiplayer games, self-interested behavior among the players can harm the social welfare. Tax mechanisms are a common method to alleviate this issue and induce socially optimal behavior. In this work, we take the initial step of…
The optimal taxation of assets requires attention to two concerns: 1) the elasticity of the supply of assets and 2) the impact of taxing assets on distributional objectives. The most efficient way to attend to these two concerns is to tax…
We consider large scale cost allocation problems and consensus seeking problems for multiple agents, in which agents are suggested to collaborate in a distributed algorithm to find a solution. If agents are strategic to minimize their own…
The question of \emph{knowledge}, \emph{truth} and \emph{trust} is explored via a mathematical formulation of claims and sources. We define truth as the reproducibly perceived subset of knowledge, formalize sources as having both generative…
The use of artificial intelligence (AI) in the public sector is best understood as a continuation and intensification of long standing rationalization and bureaucratization processes. Drawing on Weber, we take the core of these processes to…
This paper explores the interplay between transfer policies, R\&D, corruption, and economic development using a general equilibrium model with heterogeneous agents and a government. The government collects taxes, redistributes fiscal…
Less-salient taxes can ease the classic equality-efficiency trade-off by making people respond less to taxation. But deliberately obscuring taxes may be viewed as dishonest. This creates a three-way trade-off between equality, efficiency,…
In our multi-agent model agents generate wealth from repeated interactions for which a prisoner's dilemma payoff matrix is assumed. Their gains are taxed by a government at a rate $\alpha$. The resulting budget is spent to cover…
We examine an economy in which interactions are more productive if agents can trust others to refrain from cheating. Some agents are scoundrels, who cheat at every opportunity, while others cheat only if the cost of cheating, a decreasing…
We provide sufficient conditions for revenue maximization in a two-good monopoly where the buyer's values for the items come from independent (but not necessarily identical) distributions over bounded intervals. Under certain distributional…
Microscopic models describing a whole of economic interactions in a closed society are considered. The presence of a tax system combined with a redistribution process is taken into account, as well as the occurrence of tax evasion. In…
Participatory Budgeting (PB) is commonly studied from an axiomatic perspective, where the aim is to design procedurally fair and economically efficient rules for voters with full information regarding their preferences. In contrast, we take…
A policymaker discloses public information to interacting agents who also acquire costly private information. More precise public information reduces the precision and cost of acquired private information. Considering this effect, what…
Belief revision is the process in which an agent incorporates a new piece of information together with a pre-existing set of beliefs. When the new information comes in the form of a report from another agent, then it is clear that we must…